Finance Articles

Increasing Productivity - 5 Tips for Looking at the Big Picture & Improving Your Overall Effectiveness

Shailiza Manandhar — Fri, 05 Mar 2010 19:06:00 GMT

Have you ever concentrated on something so hard that the world seems to recede into the background? Like when you see a blemish on your chin and it begins to take on the dimensions of a quarter? Or when you are shuffling through a business proposal that you must deliver that day to an unsupportive group of peers?

Each, in their own right seem to gobble up every inch of computing brain space as you mull over advantages, consequences, causes, and reactions of others. Our level of anxiety over the mind numbing details might eventually increase to such an extent that other areas of our life run out of control. It gets to the point where nothing in business and in life is getting done. You are no longer productive!

When I allow myself to drift into single minded focus, my husband will look at me with an incredulous expression on his face and announce “You are just not seeing the big picture!”

You see, I was taught that the devil is in the details and consequently the big picture will take care of itself if I address every single little nuance – such as correcting a spelling error in a love letter sent to me by my fiancé’. I think that was the first clue to my husband Rick that our marriage would take on interesting elements.

When You Become So Focused On One Particular Thing – You Miss Other Opportunities in Business and in Life

A classic caution in driving is to avoid highway hypnosis where the driver’s eyes are so locked onto the road ahead that they don’t see what is developing around them. This is a ripe condition for accidents to happen. Well, we are doing the same thing when considering the changes we want to make in our personal life, careers or businesses.

When we do strategic planning, all of the elements related to our business need to be evaluated through a non judgmental process. Awareness of our surroundings can actually help us prioritize and focus on “what is” and “what needs to be” in our business decisions.

To achieve productive focus, try following the tips below before you make any short or long -term decisions.

5 Ways to Look at the Big Picture and Improve Overall Productivity While Reducing Stess and Anxiety…

1. Figure out what your present economic environment looks like? Has there been a downturn or growth in your area of expertise? What have other businesses like yours experienced and does that mirror what is happening to you? Once you have an accurate depiction of how your business arena is developing, you can begin to address areas to update, change or enhance.

2. Evaluate how your business is impacted by turnover? Is your time taken up in orienting new hires or actively working to maintain key employees in terms of running your business? Is your staff working at optimum levels and enjoying the work they do? If you are a single entrepreneur, are your physical and mental resources charged up and in good working condition? Often our personal energy overrides the physical or mental exhaustion we may feel and you may not even be aware your engine is slowing down. Take a personal inventory and do what you must in order to retain your vitality.

3. Take a solid look at your current financial situation. What amount of funds or business do you need to survive through an economic downturn and how much do you need in order to thrive? What resources do you have available to you to shore up your financial portfolio? Once these questions are answered, it will give you the foundation you need to establish business decisions.

4. Realistically evaluate your product or service offering and determine if the marketplace still wants it. Even though you feel the public needs what you have, a fickle public will purchase what it wants and may leave you behind. Consider taking active steps to interview other entrepreneurs and professionals as well as current and past clients for real-time information. Decisions made in a vacuum are never a good thing.

5. Assess what steps you need to take to catch up to the technology changes occurring in social networking, online meetings, and communication tools. Even though technology continues to evolve daily, you can utilize resources that meet your needs currently and through the next couple of years. Understand how your customers and clients relate to you and act accordingly.

Perspective is a wonderful thing. We may not like what we see (like an expanding waist line in the mirror.) But once we understand what is really happening, we can then take the necessary steps to fix it or build upon the successes that are already in place.

Focus on the big picture while enjoying the nuances of the individual elements that make up the image and environment. You will improve your overall productivity and at the same time reduce your stress and anxiety.

I think I hear my husband cheering. Sweet.

About the Author

Karel Murray is a Certified Speaking Professional, author of “Hitting Our Stride: Women, Work and What Matters” and business trainer who helps women entrepreneurs and executives balance their work/personal lives AND improve their overall productivity. Now, you can listen to her exciting, free interviews that will help you maintain and sustain a healthy business and a healthy lifestyle at http://www.JustForAMomentPodcast.com

Microsoft offers new cloud services

Ina D — Thu, 25 Feb 2010 16:54:00 GMT

OnWindows.com | Public Sector

In a keynote speech at the eighth annual Public Sector CIO Summit, Ron Markezich, corporate vice president of Microsoft Online, launched the industry’s first dedicated government cloud offering based on BPOS.

Microsoft also announced it is extending identity federation services to Microsoft Live@edu to help schools improve collaboration and security, simplify identity management and support interoperability among disparate software applications.

"Microsoft is the first and only cloud provider to offer this level of protection and security for governments."

--Ron Markezich, Microsoft

Markezich expects to be able to announce more developments in the next six months including two-factor authentication, enhanced encryption and attainment of Federal Information Security Management Act certification.

“Microsoft is the first and only cloud provider to offer this level of protection and security for governments,” said Markezich. “We were able to achieve this industry first thanks to our experience providing dedicated cloud services for the past five years.”

He also announced several new customers including the City of Newark and Florida State College at Jacksonville, one of the 10 largest US universities.

“In the City of Newark, we are focused on ensuring that our IT modernisation and cost-saving programmes exceed the mayor’s overall objectives of renewing government,” said Michael Greene, CIO of the city of Newark. “That’s why we closely examined Microsoft’s approach, which blends cloud-based services and on-premises software.

“We ultimately went with Microsoft Business Productivity Online Suite - it’s the catalyst that will allow our team to focus on upgrading to Windows 7 and Office 2010,” added Greene. “This model provides us best-of-breed collaborative technologies along with the ability to comply with federal and state regulations. We’ll save money, receive guaranteed uptime, and now have the benefit of working with a trusted party to manage it with us.”

View the video featuring Ron Markezich and Curt Kolcun.

About OnWindows.com

OnWindows.com focuses on enterprise business-level use of the Microsoft Windows operating system, Windows Server System and associated software from partner companies that deliver solutions and applications on the Windows platform.

Cloud Computing Spend in 2010

Ina D — Tue, 23 Feb 2010 15:21:00 GMT

OnWindows.com | Cross-Industry

Forty-three per cent of enterprises cite cost savings as their top reason for moving their infrastructure to cloud computing, according to a survey from the Yankee Group.

The new study, Clouds in 2010: Vendor Optimism Meets Enterprise Realities, reports that 75 per cent of enterprises are allocating no more than a third of their 2010 IT budget to the cloud.

While the 26 thought leaders Yankee Group interviewed for the report all have high hopes for cloud computing this year, enterprises cite key stumbling blocks, including security, performance, standards and interoperability issues.

“Although most vendors emphasise their commitment to ‘cloud openness,’ the jury is out as to which vendors can or will deliver on that promise,” says Agatha Poon, senior analyst at Yankee Group and co-author of the report. “Industry players will struggle to come to terms with cloud openness in 2010, and many will find it difficult to unlock their platforms - and their customers.”

The report also found that security and availability are the top two barriers preventing enterprise usage of cloud computing, even in private cloud scenarios.

About OnWindows.com

SEC Clears the Air: New Guidance Clarifies Climate Change Disclosure Requirements

Ina D — Wed, 03 Feb 2010 17:45:00 GMT

By: Lee Barken, CPA

While President Obama drew 48 million viewers for his State of the Union address, another noteworthy – albeit quieter – presentation was being made across town at the Securities and Exchange Commission (SEC). The SEC, not particularly known for its marketing prowess, used the same day that Obama took the podium to announce that the SEC commissioners had voted to approve the release of interpretive guidance on financial disclosures related to climate change.

In what might be characterized as the pin drop heard around the world, the SEC highlighted four areas where climate related disclosures may be required:

Impact of Legislation and Regulation
Impact of International Accords
Indirect Consequences of Regulation or Business Trends
Physical Impacts of Climate Change

Science and Environment Commission?

SEC Chair Mary Shapiro was quick to point out that the interpretive guidance is not an official position on climate change. "We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics," said Schapiro.

In addition, it was noted that a guidance document does not create new laws or requirements, but rather provides direction on how existing laws should be interpreted in light of an emerging issue. Guidance documents, similar to the one issued in 1998 related to Y2K disclosures, are intended to promote consistency between company reports and provide decision useful information to investors related to company risks.

Serious Pressure

According to CERES (pronounced “Series”), a coalition of over 80 institutional investors with over $8 trillion under management, “The lack of specific guidance until now has resulted in weak and inconsistent climate-related disclosure by public companies.” CERES had been petitioning the SEC to promote climate disclosures since 2007.

One CERES member, the California Public Employees Retirement System (CalPERS) publicly praised the move. "We’re glad the SEC is stepping up to the plate to protect investors,” said Anne Stausboll, CEO of CalPERS. “Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not."

A Partisan Divide

Support for releasing the guidance was far from unanimous. The 3-2 vote fell squarely along party lines, with 3 democratic commissioners voting in favor and 2 republican commissioners opposed. According to Commissioner Kathleen Casey, “I do not believe that interpretive guidance relating to disclosure of the effects of legal requirements and reputational pressures on registrants in the context of climate change is necessary or appropriate.”

Another concern, expressed by Commission Troy Paredes, was the potential for confusion. Said Paredes, “What triggers a ‘reputational damage’ or ‘physical effects’ disclosure is far from certain, as is the scope of any such disclosure if and when required.”

Climate Disclosure Standards Board

For most companies, climate change disclosures are not a new phenomenon. For years, shareholders have been putting pressure on companies to provide more transparency regarding Corporate Social Responsibility (CSR). A number of resources exist to provide assistance to companies trying to address these issues.

Most notably, a consortium of business, environmental and accounting groups have come together to form the Climate Disclosure Standards Board (CDSB). In 2009, the CDSB published an extensive guide to help companies develop climate change disclosures. The “CDSB Reporting Framework” report, along with accompanying Reporting Templates, focuses on how to make disclosures that provide investors with decision useful information related to climate change.

Let the Sun Shine In

There’s an old saying that sunshine is the best disinfectant. By encouraging companies to provide greater transparency, the SEC ruling will result in better disclosures. These disclosures, in turn, will help investors make better capital allocation decisions. As companies adjust to the new guidelines, efforts such as the CDSB can help ease the transition.

Reporting climate change disclosures will provide incentives for companies to monitor and manage their sustainability efforts. It also provides an opportunity for companies to publicly highlight their ongoing activities and leadership positions. While this may be one small step for the SEC, the move is one giant leap forward in recognizing that business and environmental issues are deeply interconnected.

About the Author

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the US Green Building Council, San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology. You can reach him at 858-350-4215 or lbarken@hwcpa.com.

Quick Thinking

Tracey Cummings — Tue, 22 Dec 2009 15:52:00 GMT

European insurance provider Towergate Partnership has centralised its data repository, reducing the time it takes to run reports from three months to just three hours. Lindsay James reports.

Established in 1997, Towergate Partnership is Europe’s largest independently-owned insurance intermediary. In just ten years, the company has acquired more than 150 new businesses. It provides specialist underwriting agencies and regional brokers with a range of insurance products. In 2007, the gross written premiums controlled by Towergate connected businesses exceeded £2.1 billion (US$3.8 billion).

It is critical that Towergate executives have access to timely, comprehensive business data to steer the company’s performance within their region or division. For example, they need data on a variety of policies, services and customer practices, such as the amount of gross written premiums its companies have underwritten, commission fees and transaction types such as new business or renewal policies. “Our executives rely on this data to help them deliver the appropriate support and action to the businesses within their remit, and ensure they can maintain a high level of profitability,” says Richard Woodhams, group business information manager at the company.

But, until recently, Towergate executives had to rely on three-month-old data to analyse their regional and divisions’ performance. Woodhams explains: “With each acquisition we were given different applications, processes and procedures for capturing data. This meant that the business intelligence (BI) team members had to gather data from more than 30 different IT systems across the UK, and then consolidate this data into presentable business reports before they could release it to executives.”

Woodhams says that in this fast-paced, innovative business environment, three months was an unacceptable wait for executives – who work to demanding key performance indicators (KPIs). “We realised that as the company expanded, it would become increasingly difficult for the team to collect data from the array of systems and collate it into the timely reports required by executives,” he says.

Woodhams identified the need for a centralised data repository that managed all business data from each division. His nine-strong team has numerous projects on the go, so he decided to outsource the data warehouse project to a reliable, experienced provider. In 2006, Woodhams tendered for services from ten suppliers.

As a result of the tender process, Towergate decided to work with Microsoft Gold Certified Partner Moore Stephens Consulting. “Moore Stephens has insurance industry expertise, and an excellent portfolio of successful data warehouse implementations, in addition to extensive Microsoft experience,” says Woodhams.

Moore Stephens presented Towergate with a detailed proposal for a solution based on Microsoft SQL Server 2005 data management software. The solution consolidates data from the company’s different business applications with Microsoft .NET connection software and SQL Server 2005 Integration Services. It uses SQL Server 2005 Reporting Services and SQL Server 2005 Analysis Services to provide a centralised reporting environment and useful reporting tools for employees. The team at Moore Stephens also incorporated ProClarity Analytics Server – a component of Microsoft Office PerformancePoint Server 2007 BI software – to provide employees with an at-a-glance performance dashboard.

With the SQL Server 2005 solution, data is extracted from all business applications on the last working day of each month. “Within three days, that information is available in a report or on a desktop dashboard,” says Woodhams. “Some Towergate companies use a hosted service to manage their applications and extract the end-of-month data into a flat file, which the BI team incorporates into the SQL Server database.”

To create a report, executives access an easy-touse browser-based interface that links them to the Towergate broking-data warehouse on the company’s intranet. From here, they can choose to run up to 48 different reports, which provide information on different business operations. “We created report templates for the data formats we knew had the most value across the business, but we can easily add new ones as required,” says Woodhams.

Moore Stephens built a pilot project for the system which was running within a month of conception. This gave the BI team the chance to demonstrate the potential of the new system to other business units and assured them that the company could manage the rollout seamlessly. Paul Latarche, Moore Stephens’ director, explains that the Towergate project wasn’t for the faint-hearted. “We faced the prospect of integrating 30 different source IT systems from 120 companies, within a four month timescale,” he says. “This was a challenge, especially when you consider that Towergate acquire an average of 1.5 companies each month. Our solution delivered corporate dashboards for the whole group on time and within the budget.”

With business data now consolidated into one central repository, employees can easily access useful business information. Woodhams says: “With SQL Server 2005, we can create reports in three hours, rather than three months. Executives are equipped with timely information, which helps them to analyse operations and effectively manage KPIs.”

The templates created by Woodhams' team have proved very popular. “We have reports that previously took two days for each office to prepare, equating to approximately 140 days of employee time a year. That same report is now produced at the click of a button,” he says. One such report is where gross written premium and commission by product or policy line is calculated. Another report captures and calculates data on the quantity of new business generated by an account executive. “It only takes half a day to create report templates for this type of data, and then it can be used repeatedly to deliver real business value,” says Woodhams.

Employees can also easily create unique data configurations in addition to using the standard KPI reports created by the BI team. Woodhams explains: “We created the templates with the most value across www.onwindows.com After training, it only takes users an hour or two to create personalised dashboards and reports. They can then store this in their own folders on the intranet under ‘my view’ the business, but if someone wants a one-off report they can set this up themselves without much effort. If it has value for other regions or divisions, our team will create the template and add it to those available on our intranet site.”

Woodhams provides user training sessions to all employees who are then equipped to create customised KPI views on their desktop computers. “We provide a half-day training session where employees learn to create their unique views,” he explains. “After training, it only takes users an hour or two to create personalised dashboards and reports. They can then store this in their own folders on the intranet under ‘my view’.”

The company’s regional directors use this to their advantage. “Executives create a view to give them the information they want, in the format they want it. So, the screen will have a number of headings across the top axis—for example, month by month, and the company or area. Items down the side axis could display data such as the number of renewed policies, cancelled policies, and policy types,” says Woodhams.

Now that employees work with accurate up-to-date data, they can quickly and easily analyse complex information. Woodhams says: “SQL Server combined with personalised dashboard views means that employees gain a more granular insight into operations. For example, if an executive sees that his or her region is doing well, it’s possible to drill down to the metrics beneath the KPI. Because although one region may be performing well overall, it could be that one company is doing extremely well, while another is underperforming significantly.”

With such detailed analysis at their fingertips, employees can respond to issues and events before they significantly affect the group or a division’s overall performance.

The scalable solution is also the backbone for a new Microsoft customer relationship management (CRM) system. “As we continued to acquire new companies and business lines we became acutely aware of the need to support customer relationships,” explains Woodhams. “We have worked with Moore Stephens to take advantage of our existing data warehouse infrastructure and build a companion CRM system based on Microsoft Dynamics CRM version 4.0.”

To be used internally, this solution will help employees to gain greater insight into the way customers operate and how they make their insurance purchasing decisions. “The fact that we have over a million customers made it impossible for our staff to deliver a personal service,” explains Woodhams. “However, with the new CRM solution we will be able to do exactly that. Our customer representatives will have access to up-to-date customer information including quotes, policies, claims and complaints. This means that they can provide customers with the information they need, all at the click of a button.”

As time moves on, Towergate expects to continue to work with Moore Stephens. “Moore Stephens is our preferred BI supplier and we have created a very successful relationship with the team there,” concludes Woodhams. “As we look to the future Moore Stephens will undoubtedly be a part of it.”

Every Problem has its Solution

Tracey Cummings — Tue, 01 Dec 2009 21:10:00 GMT

Paul Latarche explains how innovative technology can help the insurance industry

For every problem there is a solution. The trick is to find the right one. Einstein probably wasn’t thinking of insurance when he said that we can’t solve problems by using the same kind of thinking we used when we created them, but there can be few better examples to illustrate the maxim. Against a fast changing financial backdrop, insurers have to be able to identify trends, anticipate losses and react quickly.

Globalisation of the insurance market is one key trend. Globalisation is leading to the creation of multiple operating units often working with disparate and differing administrative and operational systems. The challenge here is to be able to source and prepare consolidated data which facilitates integrated management reporting.

The insidious effect of the financial crisis in the international money markets is highlighting the need for improved analysis of premium production, broker performance, and business trending. The key here is to be able to identify the important trends from both a pricing and overall business perspective, and to be able to react to them sufficiently quickly to limit the downside and maximise the upside.

When companies underwrite catastrophe risks, they typically do so using some form of analytical modelling. This produces a fairly robust program which can anticipate losses for a particular book of business, and which can be used as the basis for both technical underwriting and pricing decisions. What it doesn’t do is provide a holistic view of all insured risk locations, or a macro-level analysis of the entire book of business such as that which modern data warehousing techniques can provide.

The key to addressing these problems is to combine business knowledge with technology expertise. The best solutions are therefore those using modern technology and developed by teams of experts drawn from both the IT sector and the insurance industry.

Today’ s successful insurance companies need interactive – rather than static – data to facilitate the planning and decision-making process which is such a vital part of their business plan. Proper data analysis can achieve a whole range of benefits, from cashflow management to the monitoring of aggregate exposure.

The most innovative solutions, combine sophisticated business intelligence with state-of-the–art analysis and reporting capabilities designed to identify insurance-specific key performance indicators. Among other things, the solutions can identify trends in insurers’ business by measuring; losses and reserves, claims, industry concentration, geographical spread, limits, product and service segmentation, and broker performance. They can highlight under-performing areas that are in need of immediate improvement, and can significantly improve management performance, operational administration and risk identification and mitigation.

By using key performance indicators to identify trends, insurers can progress beyond a snapshot derived from static data to an interactive, real-time picture of their entire business. Successful businesses are using this technology to their advantage, to stay one step ahead of the competition, and to help them underwrite more scientifically and more successfully for their increasingly demanding stakeholders.

Sophisticated warehouse solutions provide significant benefits to insurers in three main areas. The first is a faster turnaround time. Much of the manual effort in reviewing, cleansing, adjusting, and repackaging data sets is eliminated. This results in faster modelling turnaround time and quicker decisions and quotations.

Second is greater process consistency and control: Process automation brings with it greater consistency and auditability of this key step in the submissions process. This reduces the likelihood of human error. And finally, there is the need for better holistic risk information. A consolidated repository enables analyses that is difficult or impossible in most organisations, including trending and categorisation of exposure, accumulations, or losses for a common portfolio over time. It also maps aggregate exposure, accumulation and expected losses across books of business.

Insurance is a long-established industry with a reputation for conservatism. But it also has a reputation for entrepreneurialism. Today’s leading business intelligence solutions bring together the best elements of those two traditional characteristics and wed them to sophisticated analytical techniques to help produce a business model which Einstein himself might have approved of.

About the Author

PAUL LATARCHE Director, Moore Stephens Consulting

Paul Latarche co-founded Moore Stephens Consulting and works with clients to develop stronger management information and business intelligence. Paul has more than ten years’ experience in the insurance sector and has delivered more than thirty large scale insurance solutions including at Ace Global Markets, Aon, Hannover Re, Hiscox, Aviva and Zurich Financial Services. www.moorestephens.co.uk

Risky Business

Tracey Cummings — Tue, 17 Nov 2009 21:33:00 GMT

The events of the last eighteen months are a graphic example of what happens when financial institutions get risk management wrong. Lindsay James explores the technology that is allowing financial institutions to steer clear of any unwanted surprises

The events of the last couple of years have turned the financial sector on its head, providing an example of how poor risk management practices can severely impact not only individual businesses or even an industry sector, but in fact the entire global economy.

As a result, financial institutions face a future of a more tightly controlled and regulated risk management environment. Under regulations such as Basel II, MiFID, Coso Enterprise Risk Management frameworks, Know Your Customer (KYC), and Anti-Money Laundering (AML) organisations must quickly and accurately identify risk exposure in real time, or they risk allocating capital inefficiently and missing opportunities, causing losses.

“The global credit crisis and the systemic risk tsunami is leading to a review and potential overhaul of regulatory frameworks around the world,” says Sai Sireesh, Microsoft’s worldwide director for risk management and compliance strategy. “Combined with the global and pan-Asian US$5 trillion regulatory interventions to help deal with the global economic and financial turmoil, current developments will shape the financial markets of the future.”

“Finance companies are currently focusing on a plethora of forthcoming risk management regulations,” says Steven Armstrong, senior vice president of risk management at SunGard iWorks. “Each regulatory regime has its own framework and although many synergies exist between them each set of regulations requires the financial institution to meet its individual mandates. The extreme conditions experienced in 2008 and 2009 have made the case not only for increased regulatory oversight but also for more efficient systems capable of processing data to a level of granularity greater than that envisaged when many of the systems now in use where first designed. New regulation also means that failures in an organisation’s risk management practice are far more likely to be exposed and highlighted, with all of the attendant consequences.”

Chris Curtis, head of analytical services for Experian UK and EMEA agrees: “The economic climate has prompted the tightening up of legislation within the banking industry, with an increased emphasis upon responsible lending,” says “Basel II seeks to improve on the existing rules by aligning regulatory capital requirements more closely to the underlying risks that banks face. In addition, it is intended to promote a more forward-looking approach to capital supervision, one that encourages banks to identify the risks they may face, today and in the future, and to develop or improve their ability to manage those risks.”

Experts agree the primary focus of surviving, but struggling, banks should be managing risk. Financial institutions must critically examine their enterprise risk management infrastructures to assess their relevance and responsiveness to today’s environment. At a minimum, areas of critical focus should include current business processes, data governance rules and enforcement, organisation structure, and supporting IT infrastructures and software applications.

“Risk management has become a critical part of the competitive landscape,” says Tom Bolger of risk and audit software developer Methodware. “Direct metrics like capital adequacy and product rates and offerings are tied to successful risk management. Reputational risk is also more relevant, due to greater external awareness of risk management, higher stakeholder expectations, increased regulatory scrutiny and more sensitive public relations.”

Alexander Millington, director of the trading and risk technology group at Formicary, echoes this view. “The importance of solid risk processes has become paramount,” he says. “Financial institutions must have a complete real-time understanding of every element of the risk they are undertaking to ensure they can maintain and grow their business with the approval of the new and changing regulatory environment that they now operate in.”

To achieve this real-time understanding of risk, firms need tools, methodology, and processes in place to collect, measure, and monitor enterprise-wide risk exposure. This isn’t straightforward. Much recent turmoil points not to a failure of risk management as such, but to a lack of understanding about the discipline and how it should be applied. The financial crisis has highlighted the dangers of managing risk types in isolated silos, each with its own set of tools, applications and models. Much of the failure around risk management stemmed from the inability to have a more holistic view and understanding the interdependencies of risk across different lines of business.

“We see the need to integrate existing systems being a top priority,” says Millington. “The ability to share information across a merged organisation or to leverage the efficiency of one particular system is going to be a technology mantra, for 2009 and beyond. Providing systems integration in an insightful, efficient way is the bedrock on which accurate and coherent data provision and analysis is built. There is little appetite, or budget, in the industry for expensive, complex and protracted wholesale system replacement projects – the panacea of ‘one system fits all’ very rarely exists. Rather, leveraging the competencies of individual systems and integrating across them delivers not only the benefits of centralised reporting and analysis, but also the ability to share efficiencies and optimisations across the organisation.”

“Successful risk management is dependent on having access to the right data at the right time,” says Curtis. “If information is required at the point of sale, the ability to access this information quickly and efficiently is essential, whereas in a back office function, the ability to access numerous sources of information, be that from transaction, marketing databases or third parties, and view this in a comprehensive manner is paramount. Integrated systems are key to this, enabling financial institutions to make the right decision regarding the individual in question, as well as one that is sensible from the point of view of the lender.”

Many financial services companies are turning to Microsoft to help them develop a holistic approach to compliance and streamlined governance processes. “Most users are familiar with Microsoft tools and capabilities,” says Sireesh. “Our efforts are to help maximise, extend, and enhance risk and compliance best practices. We do this at an employee’s desktop with minimal disruption. We believe that our capabilities can play a key role in the future state of governance, risk and compliance blueprints by helping bridge the last mile of best practices for the employees interface. Our contribution is at many levels. We work with best of breed risk management application partners such as Sungard, Experian, Finsbury Solutions, Methodware, Formicary, Fiserv and ClusterSeven to lower the platform cost of state-of-the-art risk analytics. At other levels, given that many risk projects take a ‘buy and build’ approach, we focus on helping clients and partners deploy fundamental tools in three related areas – processes and workflows, modelling and computing, and visualisation. Other key areas we are often asked to focus on is the SQL-based reporting services, analytics cubes and also the optimal use and control of Excel as the end user tool.”

“Database applications and spreadsheet tools built on Microsoft technology help institutions to develop models and process large volumes of data,” says Methodware’s Bolger. “Data is then easily shared. Key information can be routed automatically to decision makers, scenario analysis can show the impact of choices, and targeting of data and analysis saves time and reduces confusion.”

Ralph Baxter, CEO of ClusterSeven, believes that the value of Excel should not be underestimated. “Many risk projects have failed completely, leading to write-offs of many millions,” he says. “The challenge is to join the information silos with flexible and adaptable components. The latest version of Excel brings huge value. Unfortunately it is often ignored as the strategic component that it should truly be. The combination of spreadsheet management software with Excel is changing this perspective.”

A Microsoft-based risk analytics and reporting solution can engage users in the collecting, measuring, reporting and monitoring of overall enterprise risk exposure. “Accurate decision making is nothing without the ability to report and analyse risk,” says Millington. “Providing straight-forward, easy access to a flexible risk analysis reporting framework enables business decisions to be based on timely data in a way that is relevant to the business. Giving institutions the ability to gather and crossreference analysis quickly, and to reuse it on-demand, provides a level of confidence that decisions are based on the very latest, relevant information.”

Baxter concurs: “The most important element is for the analytical process to be sufficiently transparent for executives to know the basis on which they are using information. Too often in the past analytics have been seen as too complex for managers to use effectively.”

Microsoft provides companies with a more intuitive solution that integrates well with existing user workflow. “A Microsoft risk analytics and reporting solution makes risk analytics pervasive in employees’ everyday activities,” says Sireesh. “It does this with tools that are seamlessly integrated into existing applications and systems.”

“Microsoft is helping to bring accessible analytics solutions to a wider user base,” says Curtis. “In the past, data cubing, data visualisation, business intelligence tools and grid computing solutions have been fairly expensive and specialised. More recently these tools have increasingly become available to anyone and Microsoft solutions are at the forefront of this change.”

The Microsoft offering demands less training time for users, leading to lower overall costs. “Using familiar tools, Microsoft products serve as building blocks to help easily extend and integrate existing components to help maximise current investments, as well as build new capabilities in a cost-effective manner,” explains Sireesh.

Further benefits are highlighted by Finsbury Solutions director Jeremy Wood, who notes savings come from faster business processes, increased automation for issue identification and problem solving and the reduction in costly manual reconciliation. “Faster close periods will entail lower audit costs and compliance with regulations such as Basel II will have a direct effect on cost of capital,” he says. “But perhaps even more important are the reductions in the level of operational and financial risks that may occur through spreadsheet error or fraud, which have cost organisations hundreds of millions of dollars.”

The strategic importance of a robust risk management and analytics discipline across the enterprise is undoubtedly clear. Research from TowerGroup shows that despite reductions in financial services institutions’ overall IT spending, risk management will increase significantly this year, and continue to increase until 2012.

“Risk management practices will become further embedded into the culture of organisations,” says Curtis. “For example, the assessment of future solvency and cost of capital will not just be a back office operation – serious risk considerations such as these will be incorporated into pricing and due diligence before accepting new business. The finance industry will be heavily regulated and will have further internal demands for management information. This will increase and sustain the demand for analytics and data systems in the finance industry. The costs will ultimately be borne by investors, governments and consumers, but this may be a small price to pay for a more orderly and predictable finance industry.”

“Risk analysis will remain in the spotlight,” concludes Millington. “And we will see an increased reporting requirement emerging out of the current situation. The ability to provide and use risk analysis in a timely and meaningful way will be, more than ever before, a cornerstone of success in the marketplace. Complex financial instruments are here to stay – how they will be used, valued and analysed will change and having the ability to share data across systems to provide this is absolutely key to success.

“Providing institutions with the facility to connect trading systems specialising in specific products, valuation or scenario calculations will allow for well-informed decisions. Risk analysis is bound to become more sophisticated, and a well-connected institution, with the ability to share information across platforms and provide flexible, on-demand analysis will have a competitive edge and be prepared for additional regulatory burdens.”

Moving On

Tracey Cummings — Tue, 13 Oct 2009 17:21:00 GMT

Payments are the hub of the finance industry, yet many institutions are still reliant on legacy systems, damaging operational efficiency, customer satisfaction and margin. Lindsay James investigates the technology allowing these businesses to move forward

The financial sector is at a watershed. Its business environment is changing rapidly, institutions are facing increasing competition, and are still trying to replace earnings lost in the credit crunch.

From outside the enterprise there are further challenges mandated by regulatory developments such as the Single Euro Payments Area (SEPA), the Markets in Financial Instruments Directive (MiFID) and other changes such as those introduced by SWIFT and UK Payments Administration (formerly APACS).

“SEPA and UK Payments Administration’s Faster Payments initiatives in particular are causing banks business model and technology challenges,” says Colin Kerr, Microsoft’s worldwide industry manager for payments and core banking. “New data structures as well as new processing rules impact banks as they try to rationalise what is going on in their payments business. Effectively, the payments operations performed in the back office of the bank are becoming commoditised. Costs must be further reduced to improve margins.”

“Banks have to comply with regulations that change regularly, and they have to do this within a given budget,” says Laurent Corbel, sales director at Sword FircoSoft, a provider of watch list filtering and financial messages repair solutions. “This is a real struggle, especially as they are under pressure to reduce costs at the same time.”

At the operating level, IT staff are struggling to cope with ageing legacy systems and increasing volumes of payments, and so banks now seek a more holistic view of their business. “Banks face a myriad of internal payment instruments and systems spread across different technology platforms developed over several decades,” explains Kerr. “Each process data in different ways, and require different levels of support by auxiliary processes such as compliance screening. When one adds in the complexity of mergers and acquisitions and compliance with different national payment schemes, the convergence of systems becomes extremely daunting.”

Many banks conduct all their payment processing steps on mainframes, employing various middleware solutions to retrieve the payment from channels, and deploying a variety of back-end solutions to move them into the settlement stream. The primary argument from adherents of this approach is that mainframe processing is more efficient and creates a greater sense of security. But other banks are clinging to the mainframe for another reason; the disruptions inherent in major system changes. Replacing payment ecosystems all at once is too daunting. They simply are too big and the risk is too high.

While these concerns are not irrational, clinging to the mainframe is not the answer. As a result, many large banks are looking to leverage technology assets and improve integration between front-end channels and back-end systems. While the rapidly evolving payments market requires a strategic response, this imperative does not mean a ‘rip and replace’ of existing systems is appropriate. This type of ‘top down’ approach, which begins from idealised business requirements without considering existing IT infrastructure often leads to project failure, as it calls for large upfront investments and long timelines. Likewise, the ‘bottom up’ approach, beginning with smaller scale service-based solutions for particular requirements, often leads to a hodgepodge of systems not aligned with strategic objectives.

In contrast, Microsoft advocates what it calls a ‘middle out’ approach – a way of building multi-layer software architectures that enable gradual change. “Rather than try to consolidate what can be very different platforms into one central system, an option is to create a consistent architecture framework for financial messaging that covers the existing systems,” says Kerr. “Banks can surround legacy systems with new processes and services and gradually replace aging systems.”

“Due to cost, time and complexity it isn’t possible to replace all a bank’s systems and subsystems in one go,” says Dieter Prang, senior vice president at Fundtech. “Smart middleware applications can help banks reorganise, integrate and consolidate payment channels and related interfaces. The concept of Service Oriented Architecture (SOA) helps to transform the silo-based legacy structures into a network of flexible services.”

SOA can facilitate a gradual migration of payments processes. Research body TowerGroup defines SOA for payments as follows: “A service-based, business architecture that develops and re-uses product, operational, and technology assets to support a scalable, agile payments business strategy. This model must be underpinned by a technology framework capable of supporting legacy applications, third-party payment products, and bank-developed payment services as appropriate to support the payments business strategy.”

By taking an SOA approach legacy applications can be switched off gradually. As the reliance on legacy applications is lessened, replacement becomes a much more manageable and less risky proposition.

“SOA is the key concept,” says Prang. “It lets vendors concentrate on business processes, with functionality being part of the underlying framework of middleware and database products. The common framework and the availability of reusable services will lead to more flexibility in the design of new products, shorter implementation time and reduced initial and recurring costs.”

The advantages of gradually migrating payments processing away from the mainframe are threefold. It relieves the mainframe of a large burden – often hundreds of thousands of daily transactions. This, in turn, serves to relieve some of the pressure on the core banking system, delaying the need to renew it.

“Banks can reduce the IT complexity and reduce the number of systems in the enterprise. By applying universal data models, banks can add new channels and change the back-end interface without too much of impact to their core IT systems,” says Prakash Devulapalli, head of cards and payments for Wipro Technologies. “This gives banks the scale and flexibility to expand services like integrated cash management portals, introduce new channels such as mobile, while meeting regulatory requirements. Banks and financial institutions can hit the market with new integrated offerings more easily and offer competitive pricing to gain market share.”

Albany Software’s Georgia Leybourne argues cost savings can be achieved as a result of efficiencies from automation. “Automating payments reduces the need for manual resources for bank and corporate. A decent payments solution can provide competitive advantage, visibility of exposure, tighter security and less fraud.”

Microsoft’s approach to creating a payment platform permits financial institutions to make the choices they consider appropriate. “Our main solution in the space is the Payments Services Factory,” says Kerr. “This is a BizTalk and SQL-based framework that embodies the SOA paradigm, allowing banks to re-engineer payments operations by addressing financial messaging – providing that view across payments operations using tools such as Microsoft Excel or SharePoint.”

“BizTalk is a flexible middleware product with many additional integrated services and interfaces,” says Prang.

“This enables vendors to build payment products using a proven and open framework in a shorter time and for reasonable prices. Furthermore it allows banks to be more independent. The open BizTalk framework enables them to build their own adapters and interfaces or to monitor their business activity.”

For banks choosing to leverage SWIFT, Microsoft offers BizTalk Accelerator for SWIFT (A4SWIFT) to connect internal payments applications and generate SWIFT format messages for both inter-bank payments messaging and settlement of securities transactions. The growing trend to interconnect disparate payments systems, including those designed for the settlement of securities transactions makes BizTalk A4SWIFT applicable for financial institutions and corporate treasuries alike. In fact, Microsoft group treasury uses BizTalk A4SWIFT to connect to banking partners around the world via a single connection to SWIFTNet.

The technologies Microsoft uses to underpin its payments framework also form the basis of its many partner solutions. Take the Financial Messaging Service Bus (FMSB), for example, which Kerr describes as a toolkit which takes BizTalk for financial messaging to the next level. “FMSB provides clients and partners with pre-built messaging services including a message database, business activity monitoring and message itinerary services to define operational workflows.” Kerr adds: “These are services which require configuration rather than ‘engineering’. The FMSB simplifies partner application development and also the implementation of a payments framework within a bank.”

Partners are able to build on Microsoft technologies, devoting more resources to developing leading edge functionality through tools such as Silverlight. “Microsoft has flexible frameworks and competitive solution offerings in the payments space,” says Devulapalli. “The open framework allows partners like Wipro to leverage and build additional functionality to provide specific support for regional requirements.”

Microsoft partner Rapid Addition has developed an add-on to A4SWIFT. “Our FIX Shortcut helps streamline securities processing by facilitating straight through processing from trade to settlement, from FIX notice of execution through to SWIFT MT54x and beyond,” says chairman Kevin Houstoun. “Customers use BizTalk with our shortcut and the A4SWIFT adaptor to streamline middle and back office processing.”

Conversely, Sword FircoSoft has created Firco STP – a solution that sits on top of Microsoft BizTalk and reformats, or rewrites if necessary, structured payment messages and therefore increases straight through processing rates. “Firco STP Payment takes as input a payment message and returns in milliseconds a message qualified for automated processing by the financial institution’s existing payment system,” says Corbel.

The future for payments looks promising, and Microsoft will play a significant part in helping financial institutions to excel in this area. “Our goal is to help our users set their own direction within the future of payment processing, and to enable them to benefit from those technologies that will assist them to realise their strategic choices,” says Kerr. “Some will be emphasising reduction of costs; others opening new revenue sources. For many, strategy will be to respond quickly to changing regulatory or competitive conditions. Some will be seeking competitive advantage in enhancing corporate-to bank communications channels via SWIFT.

“Regardless of strategic emphasis, the payments platform has to be flexible enough to ensure fast reaction to changing conditions, which is why interoperable, standards-based financial messaging is essential. Microsoft’s goal is to help clients manage payments processing; maximise revenue opportunities; and to provide scalability, reliability and affordability.”

New Challenges in Risk Management and Compliance

Tracey Cummings — Tue, 04 Aug 2009 17:30:00 GMT

As the global economic crisis rumbles on, financial firms of all kinds anticipate an overhaul of risk management and regulatory frameworks. We asked Microsoft's Susan Hauser for her views.

What has the past year meant for financial firms in terms of risk management and compliance?

Over the past 12-18 months, we’ve seen major changes in the organisational structure of many financial institutions, as well as the products they offer. Mergers and government bailouts are only part of the story. As banks try to ensure their survival, we’ve seen a more cautious attitude to lending and measures – such as interest rate cuts – aimed at stimulating the credit markets. Through all of this, banks are both recognising past failures and facing new challenges in governance, risk management and compliance.

It remains to be seen how the regulatory landscape will develop – will it go to a more light-touch, supervisory mode, or a heavier-touch, regulationdriven model? While there are some trends towards the latter, the picture is not yet clear. However, one thing is obvious: risk management is more crucial than ever to financial organisations, and failing to deal with it is not an option.

What are you hearing from customers about their expectations and concerns in this area?

Many financial firms are trying to understand how they can enhance their risk management capabilities, keep up with all the regulatory changes, and review proposed new changes, while at the same time ensuring their survival in the aftermath of the current financial crisis. In such an uncertain situation, nobody can say that this will be easy – a fact that is reflected in the predictions of analysts like Tower Group that despite pressure on budgets, risk management will be a key area for IT spending among financial firms this year. However, while the issues might demand some investment, there are steps that businesses can take to minimise the cost and complexity of their risk management environment while maximising its effectiveness.

What advice would you give to firms considering a risk management and compliance project?

In risk management, context is key – it might take somebody who works with certain tools on a day-to-day basis to recognise that something is amiss, while a manager looking at a set of figures might see nothing out of the ordinary. That gives all the more reason to take a holistic and inclusive approach to risk management and compliance, rather than boxing it off as a separate function – risk affects every part of the business, so risk management should be intrinsic to every function. For this reason it’s a good idea to take a step back and look at how risk management and compliance practices need to work across the organisation, as part of everyday operations. This in turn can lead to a realisation of how your existing technologies can be used to address risk management and compliance issues – a practice that can help to minimise complexity, as well as IT spend.

Microsoft’s focus is to help its customers enhance and execute their vision for an integrated risk management and compliance culture and environment. By adopting a people-ready business approach based on five principles, which are to simplify and automate the adoption for employees to be more productive; embed risk management best practices in everyday activities; enhance the risk analytics and computing and unlock data; manage risk across structured and unstructured business information; and define long-term sustainable risk management and compliance blueprints, it helps financial institutions execute their long-term risk management and compliance vision and blueprints.

How can firms make the best use of existing technologies in this area?

By using service-oriented architecture (SOA) based technologies that are familiar to users, financial firms can go a long way to ensuring a solid risk management and compliance environment. New risks and regulations are bound to emerge, but basing the system on SOA will enable it to be continuously updated with new applications as regulatory and business demands evolve. We have seen an increasing adoption of Microsoft Office SharePoint Server 2007 (MOSS) for enterprise and operational risk management frameworks.

For Bank of America, one of the world’s leading financial institutions, compliance with international financial regulations is of vital importance and the recent global Basel II Accord regulation, required for implementation by US banks by 2011, resulted in the bank’s creation of a portal solution based on MOSS this past year. Developed and deployed in just four months, the risk and control self-assessment solution collects data associated with operational risk from employees and compiles it so as to accurately measure operational risk at an enterprise level. Some 1,500 Bank of America employees across 200 organisational units use the portal solution to access data on 1,800 key operational risks. About 800 of those risks are reported as part of the bank’s enterprise risk and control assessment, as required by the Basel II Accord. The bank has enjoyed significant benefits from the solution, which include: efficient development and deployment; a powerful way of assessing trends; and an easier approach to risk mitigation.

Microsoft works with a wide array of partners across the world, many of them financial sector specialists. These partners deliver solutions that take advantage of strong infrastructure and reusable business components while using enterprise-ready technologies. Our team led by Sai Sireesh, director for risk management and compliance, is driving efforts to embed more risk management and compliance related functions and capabilities in our technology offerings. For example, our recently released IT Compliance Management Guide and IT Compliance Management Resources Workbook can help companies view their compliance obligations in the context of authority documents such as Sarbanes-Oxley, enabling them to assess their risk management and compliance needs and address them by implementing controls within their Microsoft infrastructure.

About the Author

Susan Hauser is Vice President, Worldwide Financial Services group at Microsoft. Susan began working for Microsoft in 1997, focusing on banks in New York City and was responsible for wins where retail bank branch platforms deployed on Windows NT and thus established Microsoft as a key player/provider within financial services. In 2000, she assumed the role of financial services director for the East Region in the US, where she managed strategy, operations, and key relationships with strategic financial services customers across all financial services firms in the region. The IT Compliance Management Guide is free to download at: http://technet.microsoft.com/en-us/solutionaccelerators/default.aspx and www.microsoft.com/industry/financialservices

Get the Balance Right

Tracey Cummings — Thu, 09 Jul 2009 18:59:00 GMT

For any financial firm, the key challenge today is how to save money while attracting and retaining customers. Jacqui Griffiths found out how Microsoft is creating efficiencies to give every firm the technololgy it needs at the right price.

Over the past year, global market turmoil has led to a remarkable series of events for financial firms of all kinds. The fallout from this will impact individuals, communities and organisations, whether high net worth investors, low net worth bank customers, or the providers of the many products and services that these people use.

In this situation, sensitivity is a must. While in a broad sense everybody is under pressure, recovery will depend on the ability to pay attention to detail. In order to recover from the economic turmoil they face, financial organisations need to restore the confidence of customers, and to achieve this, they must be sensitive to each customer’s needs, whether that customer is an individual or an institution – only then can they can drive sales by providing the financial products most relevant to each customer, at the right time.

Perhaps most pressing for customers and providers alike is the need to save money. Indeed, for financial services firms right now, every cent of expenditure must be justified while sales and customer service need to improve. Unfortunately for many, particularly when it comes to IT, economy has often meant compromises that can be detrimental to customer service, or lead to costly fines from regulators because corners were cut. Clearly, this type of false economy must be avoided – but can financial organisations achieve economy without compromise?

“While it is anticipated that technology spending will slow through this market downturn, the fundamental truth is that superior customer service, timely advice and actionable results are actually needed more during these turbulent times,” says Brad Prodger, director, worldwide Advisory Services at Microsoft. “Now, more than ever, investors are demanding expertise from their financial advisors in helping them to navigate this turbulence. By achieving a holistic view of clients’ portfolios and interactions, financial advisors can achieve a competitive advantage.”

Microsoft’s experience in providing technology for companies across the financial industry now comes to the fore.

“While different areas of financial services – such as buy-side, sell-side and insurance – face different challenges, the current economic system has also thrown into relief the similarities between many of those challenges,” observes Prodger. “For example, whatever your line of business, siloed information will drain productivity – so every financial advisor, whether an insurance agent or an institutional investment consultant, can benefit from the 360- degree customer view that technologies like Microsoft Dynamics CRM, SharePoint Server and Customer Care Framework (CCF) can deliver. Once you look at it from this perspective, you see that there are some core similarities between potential solutions.”

Platform for Success

In order to address these needs, Microsoft developed Advisor Platform, its wealth management solution for financial advisors in banking, insurance and capital markets industries, over three years ago in the US. The solution’s integrated framework is aimed at increasing the productivity of financial advisors through 360- degree portals, which provide comprehensive visualisation of client data with workflow capabilities, enabling advisors to differentiate themselves through superior customer service. The success of Advisor Platform has seen its continued expansion – now established in Western Europe and the UK, it is also building momentum in emerging markets in Japan, Singapore, Hong Kong, Korea and Australia.

Building on the strength of the Advisor Platform approach, Microsoft went on to address the customer-facing issues of insurance agents and buyside and sell-side financial firms by developing Agent Broker Services and Institutional Client Platform. The former was developed globally a year ago, while the latter, during the same timeframe, has so far focused more on the UK market. Both of these solutions are gaining momentum, with early adoption in the UK and US, and a developing partner community that is key to this success.

Now, in recognition of the technological similarities at the core of these solutions, Microsoft has combined them under the umbrella of Microsoft Advisory Services, to enable financial firms to achieve an economical technology while maximising advisor productivity.

This is not to suggest that there is a technology cureall solution to the problems faced by different financial firms. But by working with the similarities between the technologies used, it is possible to create low-cost, high-value advisor solutions to help each of these organisations manage risk, assist with integration efforts and deliver a superior customer experience.

“One of the most powerful aspects of the Microsoft stack is that it is designed to easily snap in important tools that then can be consumed by advisors, call centre representatives, business and compliance executives and clients, as well as administrators and developers,” says Prodger. “For example, Visual Studio encompasses all technologies and is ideal to help reduce cost when additional functionality is required.”

“At Microsoft we understand the impact the economic downturn has had on all our customers, and we know that financial services firms are feeling the effects perhaps more than any,” says Brad Prodger, director, worldwide Advisory Services, Microsoft. “We know that every cent of expenditure must be spent wisely and with as positive an impact as possible. To this end we have brought together these products under the umbrella of Advisory Services, in a way that clearly articulates how Microsoft technologies can be leveraged to reduce costs, maximise the value of investments already made, and increase client satisfaction and revenue – in short, to save our customers money.

“By deploying workflow-enabled 360-degree portals, financial advisors will be much better equipped to manage multiple tasks, such as planning and moving assets to safer instruments, improving the depth and breadth of services, and creating opportunity for their wealth management organisations,” continues Prodger. “This delivers on the biggest question that our customers are faced with – how to do more with less. It creates economies while delivering a platform for scalability that is future-proof.”

The Key Ingredient

The aim of any IT solution is that the value it delivers to the customer is greater than the sum of its technological parts. In the case of Advisory Services three key ingredients are involved in achieving this – economy, performance and partners. The first two elements, where enterprise-level technologies are used, and indeed reused, in the most cost-efficient and productive way, seem simple. But the key ingredient binding these together is the Microsoft partner ecosystem.

Microsoft is going to market with Advisory Services under a hybrid partner model that plays to the strengths of its partner companies. “Our partners have a huge part to play in Advisory Services,” says Prodger. “Advisor Platform has a large and wellestablished partner ecosystem, and we recognise that in each region, the partners are the ones that have the relationships, the local knowledge and the specialist expertise that gives them the edge in providing the right solutions for each customer.” For example, he says, in the Asia Pacific region there is significant market potential for Advisory Services, and Microsoft’s partners in the region are the key to unlocking it. “We’re working with partners like Accenture, Avanade and HCL to build sales plans, which focus on specific solution areas, right down to the region those solutions will be used in.”

Microsoft has some 76,000 partners in financial services, organised into a tiered structure. In the growing Advisory Services market, the Managed Partners – which often work within a specific region – are key to the company’s growth. “We work closely with these partners,” says Prodger. “We interface with them on what to sell in their geography. These partners have a clear focus on both their territory and their technology and industry specialisation. They are crucial to extending the Advisory Services offering to a wide audience in a way that will create significant value for each customer.”

This evolution of a specialist, regionalised partner network alongside the Advisory Services offering, speaks of a smarter approach to addressing the needs of customer-facing financial services staff. “Services such as Institutional Client Platform and Agent Broker Services are growing fast in terms of adoption,” says Prodger. “There is a huge and growing market for Institutional Client Platform, for example, because many jobs in private sector financing and capital markets are being automated. By combining core technologies, reusing IT investments and adding the in-depth knowledge of a local partner, we can give financial advisors more time to spend with their customers, and the opportunity to lower margins, gain visibility, and to do more with their capital.”

Simple but Effective

The Microsoft Advisory Services approach takes the core technologies used by Advisor Platform, Institutional Client Platform and Agent Broker Services, and enables financial firms to create solutions that help resolve the issues that are key to their business.

The offering is organised in three key building blocks. The first block enables financial firms to expose the data locked away in disparate systems using powerful technologies such as Microsoft SQL Server and CCF, which integrate into disparate systems. Next, the organisation can compose, or make sense of the data using SQL or CCF, regardless of what code or application it comes from, or how it is used. “The data is exposed at workflow level in the way the advisor works,” says Prodger. “These technologies deploy much faster than many others – in under three months versus more than a year for some of our competitors – because of the .NET/Web services oriented architecture.”

The final stage is the consumption of the data, which is presented in a meaningful and usable way to those who need it. This is where advisors, call centre representatives, business management, compliance officers and even clients tap into all the services that have been exposed and composed by the first two building blocks. It means that one application platform can serve multiple lines of business (LOB), consolidating work that has historically been performed within each LOB silo and allowing for greater client transparency across LOBs to promote cross selling.

For Prodger, the benefits here cannot be underestimated. “For many clients, the single most important value proposition is that by exposing enterprise data, and leveraging entitlements and security features, they also unlock the information to business users on software that they’re already accustomed to,” he concludes. “This means the enterprise can save money by leveraging client tier technologies that are already in place and minimise training costs.”

Keeping Afloat

Tracey Cummings — Thu, 02 Jul 2009 18:04:00 GMT

Financial services specialist Luc Schamhart looks at how the financial crisis has hit the Netherlands and what measures the country is taking--and needs to take--in order to minimise long-term negative effects.

The Dutch financial sector, which has undergone rapid growth and internationalisation over the past few decades, has been hit hard by the financial crisis. Over the past quarter of a century, financial markets have grown enormously as a result of deregulation, internationalisation, rapid development of IT and increased prosperity. Their recent collapse has dealt a heavy blow to financial institutions including many in the Netherlands, which have had to rely on government intervention to keep them afloat. Discussions on how best to manage the situation once it has calmed down are in full swing, particularly regarding structure and regulation. It is, for example, recognised that the scope and execution of regulation will have to change. In these efforts, however, we must not lose sight of the fact that properly functioning financial markets are essential for economic growth.

This year the Dutch Government has had to ensure its country’s deposit guarantee scheme was extended, new bank loans were guaranteed and capital was made available. It paid €16.8 billion to Fortis/ABN AMRO by the end of January, and extended €13.75 billion in capital to various banks. At the beginning of February the capital injections totalled €10 billion for ING, €3 billion for AEGON, and €0.75 billion for SNS REAAL. On 31 March, the European Commission temporarily authorised a transaction between the Dutch State and ING Group, involving the transfer of 80 per cent of the cash flows from ING’s Alt-A mortgage portfolio to the state. The move was necessary because the impact of uncertainties surrounding the group’s capital and results was much greater than anticipated credit losses warranted. The transaction largely removed these uncertainties. In return, the Dutch state will receive a reasonable fee, and has a considerable chance of receiving positive cash flows. In total the transaction adds up to five per cent of the Dutch GDP.

The problems in the financial sector are accompanied by a decrease in the growth of credit, caused by the cyclical downturn which led to a decline in demand. The situation remains precarious for many Dutch financial institutions, as evidenced by high insurance premiums against bankruptcy on their bonds. In order to minimise market disruption, it is wise to reduce bank interest rates as quickly as possible, in line with the Dutch Government’s plan, although this will not completely succeed from one day to the next in the current circumstances.

As a small, open economy, the Netherlands is extremely sensitive to developments abroad. In the current situation, there is a risk that countries will take measures to protect their own economies. This could damage international trade and the functioning of the markets, with correspondingeffects on economic growth in the long term. Financial crises usually prompt the banking sector to withdraw within national borders; banks must secure the coverage of a credible government, because account holders might otherwise be tempted to pull out their money. At the same time, such a retreat leads in the long-term to a loss in prosperity, resulting in higher capital costs. It is hoped that recapitalisation by the government can ensure that credit issuing continues.

More generally, reorganisation of the banking sector remains an important priority. Problems within Dutch banks contributed to the current situation, and these must be addressed. On the banks’ part, concerted efforts are needed to manage risk and ensure regulatory compliance. At the same time, via its shareholdership, the Government has a new role for which it certainly was not prepared.

The credit crisis begs international coordination on a European or even a world level in at least four different areas. First is fiscal policy. A certain degree of cooperation is necessary, as fiscal stimulation in one country has positive consequences for others. Second, protectionism must be avoided. Stating good intentions does not suffice; coordinated sanctions against offenders are necessary to successfully fight protectionist reflexes. Third, regulation and supervision should be harmonised, at least on a European level, and there is a need for arrangements on burden sharing of the cost of supporting the financial sector.

The fourth point has not yet been addressed: In addition to a policy for rescuing the financial sector, thought must be given to a coordinated European response in case an E(M)U member state unexpectedly finds itself in substantial financial problems. However hard the credit crisis hits the Dutch economy, for many people the effects will remain limited for the time being. The banks have been kept afloat, which is to say that all account holders (except for those who held very large deposits at Icesave) have been spared the effects of the crisis. Shareholders of many banks, on the other hand, have all but lost their entire investment. In addition, as share prices have fallen the coverage ratios of pension funds have declined sharply, so that pensions are not expected to be indexed in the coming years.

Lower inflation means that the effects on purchasing power are relatively mild in most cases, at least for those who keep their jobs. However, the effects of the crisis on the real economy will become more noticeable with time, particularly on the labour market. Unemployment will rise sharply, especially among young people, immigrants and unskilled workers. Focused initiatives to keep these groups in work by means of training or internships are therefore a good way of targeting the stimulus policy, for the short and long term.

About the Author

Luc Schamhart has worked for more than 15 years in the IT and financial services industry in the Netherlands. He advises financial institutions on controlling their risks, compliance and cost, and how to increase their revenue and profit by using innovative IT solutions developed by Microsoft and its partners.

Nonprofits Get Boost From Microsoft Stimulus Offer

Tracey Cummings — Tue, 23 Jun 2009 23:22:00 GMT

Community launch shows how Microsoft Dynamics helps social organizations integrate operations and manage business and membership needs.

WASHINGTON — June 18, 2009 — Today, at the inaugural NFP Summit in Washington, D.C., Microsoft Corp. announced the release of a stimulus package for select nonprofit organizations, associations and targeted trade groups. The event featured presentations and tutorials on business challenges not-for-profit (NFP) groups face today and how Microsoft Dynamics, the company’s enterprise resource planning (ERP) and customer relationship management (CRM) offerings, help solve some of these challenges, stimulating business growth and productivity.

The nationwide stimulus package will present qualified NFP customers with two additional concurrent Business Ready Licensing (BRL) Full Access users at no additional license cost with the purchase of an ERP Foundation Pack license — a 66 percent discount on the suggested retail price of the software licenses. This offer is available from June 18, 2009, through Dec. 23, 2009, only in the United States. NFPs must show that they fall within Standard Industrial Classification (SIC) 83xx or 86xx to qualify for the offer. The offer is available to new Microsoft Dynamics GP, Microsoft Dynamics SL, Microsoft Dynamics NAV and Microsoft Dynamics AX customers. Participating certified Microsoft Dynamics partners are also offering a credit of $5,000 in services to implement the system. This package will benefit small and large NFPs alike.

“Not-for-profit organizations have benefited greatly over the years from Microsoft Dynamics products, including Microsoft Dynamics GP, SL, NAV and AX for project accounting and financial management, and Microsoft Dynamics CRM for membership communications and tracking,” said Dave Willis, vice president of U.S. Dynamics at Microsoft. “By offering this stimulus package and creating social networks for executives at these organizations, Microsoft and its partners can help them find ways to grow and retain membership and continue to raise funds during these challenging economic times.”

Interested parties are encouraged to visit http://dynamicsnfp.ning.com/ or e-mail Lisa Malone at LisaMal@microsoft.com for more information.

About Microsoft Dynamics

Microsoft Dynamics is a line of financial, customer relationship and supply chain management solutions that helps businesses work more effectively. Delivered through a network of channel partners providing specialized services, these integrated, adaptable business management solutions work like and with familiar Microsoft software to streamline processes across an entire business.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Carbon accounting: Currency of the future?

NickHoban — Thu, 18 Jun 2009 15:04:00 GMT

By: Lee Barken, CPA

If you’re not familiar with the term carbon accounting, you’re about to start seeing it. A lot.

With a steady legislative drumbeat towards a formalized cap and trade program, carbon is poised to join the ranks of pork bellies, corn futures and precious metals. Behold, as a new commodity is born. Welcome, carbon trading, and the brave new world of carbon accounting.

Putting a price on carbon emissions
Since the dawn of the industrial revolution, the right to discharge Green House Gas (GHG) emissions has been free. Gratis. No charge. Under new national legislative proposals, however, the right to pollute freely will officially go the way of the dodo bird.

It’s hard to imagine being forced to pay for something that was free for so many years. Much like paying to check in that airline bag or paying for on board meals, it will be tough to get used to. However, it’s time to acknowledge that there ain’t no such thing as a free lunch… on airplanes, or on planet earth.

Cap-and-trade opportunities
Ultimately, a cap and trade system accomplishes a simple goal. It puts a price on carbon emissions. In the short term, pricing a pollutant will create a number of pain points, including higher costs for energy and transportation fuels. However, in the long run, there are some compelling opportunities to incentivize innovation and break the cycle of fossil fuel dependence.

Associating an economic cost with an environmental cost does something noteworthy. It put the invisible hand to work for the planet. If it holds true that people seek to maximize utility, rational actors will seek the lowest cost for energy and the most cost effective transportation solutions will flourish.

If those options are built on renewable resources, we may finally develop the critical mass necessary to break out of our dependence on foreign oil. Perhaps even more important, it could pave the way for developing countries to enjoy a “Western style” standard of living, without the destructive carbon emissions currently tied to modern economic growth.

Enterprise carbon accounting
At the May 14, 2009 Enterprise Carbon Accounting conference in San Francisco, speakers acknowledged the importance of carbon emissions from a corporate perspective. According to Paul Baier, VP Consulting at Groom Energy, “You look like a laggard if you’re not calculating your carbon footprint and reporting this information to investors, employees and the public.”

With national carbon legislation such as the Waxman-Markey bill, carbon emissions are elevated from a public relations issue to a financial accounting concern. Attorney Elise Zoli suggests that a far reaching cap and trade system will soon be a reality. According to Zoli, Partner and Chair of the Energy Practice at Goodwin Proctor, “Is it perfect? No. Is it passable? I think so.”

In its current form, legislative initiatives will cover emission sources greater than 25,000 metric tons per year of carbon dioxide (CO2). However, with a price on carbon in place, it is clear that the cost burden will reach far beyond the initial CO2 emitters. This means that anybody who uses electricity or consumes transportation fuels will be affected by carbon legislation.

Wide-reaching business implications
Carbon legislation is about more then just changing light bulbs or recycling paper. The underlying enterprise questions are staggering.

Does your company utilize shipping for supply chains or distribution? What does your energy consumption and building performance envelope look like? How about employee travel?

As companies adjust to the new pricing paradigms, a competitive advantage will be created for those companies that adapt quickly and embrace change.

According to James Sullivan, VP of Advisory Services at Clear Standards, “This is a holistic enterprise issue. Companies want to know the potential cost of regulation on their logistics chain and energy consumption so they can make good business decisions. They wonder, ‘What happens if I ship my goods from this country, made from those materials?’ Now there is a business case to take a broader look.”

However, trying to quantify and document your company’s GHG emissions isn’t a simple task. Tymon Lodder, Regional Director, West at The Climate Registry sees this challenge frequently. “GHG accounting is a fairly detailed and complicated exercise. It often takes companies two or three years to get it right.”

Standards such as the GHG protocol have been published by the World Resources Institute (WRI) to help companies understand their environmental impact. This protocol, whose full title is “A Corporate Accounting and Reporting Standard”, provides a framework for companies to establish carbon emission inventories.

Bright future ahead
As the Waxman-Markey bill continues to gain momentum, the potential for transformation is palpable. Says Zoli, “We may actually find that we are going to do something to transform the way we think about an important contaminant and something that has a large effect on the US and the world. This bill is opportunities - to play in a market that doesn’t currently exist, or a technology that is profitable or more profitable as a result of valuing carbon.”

About the Author

Lee Barken, CPA, is the IT practice leader at Haskell & White, LLP, serves on the board of directors of the US Green Building Council San Diego chapter and is a member of CleanTECH San Diego. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance and network security. Contacts: 858-350-4215 or lbarken(at) http://hwcpa.com.

The Five Stages of Death and Marketing

NickHoban — Wed, 20 May 2009 14:49:00 GMT

By: James Utzschneider

It is budget time for most companies that operate on a fiscal year that begins on July 1st. For finance professionals, that means you once again have to work with your marketing department to review and approve spending plans for the next year.

The same thing seems to happen every year. The marketing team comes in with their PowerPoint presentations listing out all of the events they want to sponsor, the radio advertising they want to do, the direct mail campaigns they want generate, the muscle car calendars they want to print, the research they want to conduct -- all in the name of driving leads and building awareness for the company.

The finance people look at all of this and ask the same question every year --- Why do you want to spend SO much money on all of this stuff, and how can you document that it actually generates a return? The marketing people in turn get all indignant and look at the finance team and say “because it’s … it’s MARKETING! You just don’t understand – we need an image, a brand, we need to generate some buzz in our market.”

The finance people scratch their heads, and ask again. “Why do you need to spend SO much money?” It’s a standoff.

As an ex-finance guy who now works in marketing, I have been involved on both sides of this cycle for twenty years.

I have come up with a model, based on Dr. Elisabeth Kübler-Ross’ book On Death and Dying, to help finance people better understand marketing people during the budget process. Think of it as the financial controller’s field guide for understanding marketing behavior. By using it, you can ask your marketing counterparts the right questions during the budgeting process using language they understand in a nonthreatening way to help reach closure around budgets. Just like the model in Dr. Kübler-Ross’s book, which I first read in high school a long time ago, not all of these stages occur in all marketing people, and they don’t always occur in order. But they all occur.

Stage One: Denial
"I am going to ignore your email asking me to justify the cost of the local golf tournaments we plan to sponsor next year. You obviously sent it by mistake, and if you didn’t then you just don’t get it. Maybe you’ll go away."

This is not a good sign because it shows there is a big disconnect between finance and marketing. Sending more email, or even forcing a meeting around “FY08 Golf Tournament Cost Justification” might help you address this particular budget item, but it will not help you address the root cause.

The solution for this disconnect is pretty straightforward. Communication between the finance and marketing teams needs to be a year-long process, where the finance team keep abreast of the marketing team’s activities all of the time. And not just from a cost control perspective, but from a “I’d like to learn more about how we reach out to our market” perspective. So once this budget cycle is over, ask if you can sit in on the marketing team’s status meetings once a month next year. It will go a long way towards avoiding standoffs next year.

Stage Two: Anger
"How DARE you question the effectiveness of the local radio advertisements we are running featuring Czech hockey stars. WE ARE MARKETING and you are just a bean counter. You don’t get it.”

Even if you are sitting in on the marketing team’s meetings on a monthly basis and have built a good relationship with them, it still won’t necessarily make you a marketing person, at least not in their eyes. So you’ll continue to encounter situations like this, where the marketing team becomes angry if they think you have the temerity to question their “marketing judgment” on things like using Czech hockey players on the radio to sell your products.

The solution here it to agree upon a set of metrics to measure all marketing activities. I am now convinced that everything a marketing team spends money on can be measured using simple, relatively inexpensive techniques. Radio ads should either drive awareness (measured by simple surveys) or leads (measured in your CRM system). Golf tournaments should drive leads or increased spending by existing customers. Even doing things like creating a new logo can be measured by “likability” surveys conducted at a local mall. By moving to a set of agreed upon metrics, you can have a prioritization discussion with your marketing friends that will help you avoid the need to make judgment calls around things like advertising where personal preferences and judgment can get in the way of a business discussion.

Stage Three: Bargaining
"PLEASE let me keep the muscle car calendar we print for our customers every year. We know they love it based on a quick web survey we do, and if you let us keep the calendar we’ll promise to cut back on the hors d’oeuvres we serve at the golf tournament.”

Now you are getting somewhere, because you have moved from a judgment discussion to more of a fact-based discussion of budget priorities based on agreed-upon metrics! The marketing team can begin to negotiate budget items based on their ability to understand the metrics behind different areas of spend. They can even feel good about it.

But this can create a big problem for the company as a whole, because even if you can measure something accurately doesn’t mean you should do it. There needs to be an agreed-upon strategy between finance and marketing on the right priorities for the company that you can use as the basis for prioritizing spend. Time after time I have been involved in extremely well measured, well executed marketing campaigns that were the wrong things to do because they prevented the company from achieving strategic goals like expanding to a new territory or launching a new product. The muscle car calendar might be well-liked by existing customers but it might not be the best choice if the company’s main objective is to generate new business through prospecting events like the golf tournament.

Stage Four: Depression
“I hate marketing. You have taken all of the creative elements out of it and turned it into a numbers game. Why didn’t I listen to my mother and become a doctor?”

This is a bad, bad stage, because your company actually needs creative marketing people who can target the right audience for your company and then create excitement in that audience around your company’s offerings. Just look at what Apple does with marketing. If you create too many measurement tools and justification forms for the marketing team to fill out, they will wind up hating themselves and leave the company or even worse, leave the profession. I have been involved in marketing teams where the marketing managers in branch offices had to spend as many as 4-5 workdays a month filling out status reports and sitting in on “rhythm of the business phone calls”, all in the name of quantifying and tracking marketing activity so the company can know they are being effective.

The answer, of course, is for the marketing and finance teams to agree upon a balance between measurement and execution. The best way to do this is to agree upon a set of strategy priorities measured by a set of agreed-upon metrics that are tracked by automated tools like your CRM system and customer survey tools on the web. Once you have this sort or agreement and system in place at the start of the fiscal year, the marketing team can go do what they do best with minimal intrusion from finance.

Step Five: Acceptance
"It really doesn’t matter what the finance team gives us as a budget. We will be creative and figure out a way to do what we need to do with what we have. Besides, marketing is about ideas and communication, not money."

Wow, is this a great stage to be in. It means your company has a Zen master of marketing in your presence, a Jedi Knight of demand generation and positioning who knows there are many, many different techniques you can use to reach your customers in a unique and special way, and that spending more money does not always increase marketing effectiveness. They know how to create buzz in the press, how to do guerilla marketing to reach customers at low cost, and to even turn your existing customers into a sales force for your company.

The correct thing for the finance team to do on the rare occasions when they encounter this type of marketer is to embrace them and then increase their budget for next year! Because you can do so knowing that they are not spending money for money’s sake but because the marketing team will view the spend as simply another tool they can use to get the job done.

Fast Route to Efficiency

Tracey Cummings — Fri, 15 May 2009 17:48:00 GMT

Rapid process reengineering can provide a way for financial firms to quickly achieve efficiencies, says Dermot McCauley

The downturn in the global economy has gathered pace and businesses everywhere must achieve efficiencies quickly while still serving clients and otherwise ‘getting the job done’. Companies are looking to create efficiencies, and rapid process reengineering could provide a practical way to achieve this. But can you justify a rapid process reengineering project when headcount reduction may seem the only available fast-payback approach? A look at the principles and practicalities of rapid process reengineering will answer this question.

Didn't We Try that Already?

Reengineering is not a new topic. In the 1990s the western world was swept by a wave of reengineering projects that promised to remake major corporations from the ground up. In July 1990, the Harvard Business Review published a now famous (some say infamous) article by reengineering guru Michael Hammer, entitled Reengineering work: don’t automate, obliterate.

Hammer’s thesis, widely accepted in corporate board rooms at the time, was that small improvements in working practices were simply not enough to meet the business challenges of the early 1990s. A wave of economic troubles was bearing down on the corporate world and the only option was major change. Tinkering at the edges of business processes would fall short of achieving the change needed – incremental business process improvement was out, and major business process reengineering was in.

But the promise of reengineering, though delivered in some cases, was frequently unrealised. While a growing church of reengineering evangelists ministered to the needs and ambitions of executives, the disappointing truth emerged – reengineering often fell short. Reengineering programmes were frequently too big; their ambitions too grand; their results too meagre; their expense too great. By the end of the 1990s the reengineering wave had itself crashed. In its wake lay a trail of failed initiatives and, among the wreckage, a wealth of lessons to be learned.

A Way that Works Today

Fast-forward to 2009 and business processes are again centre stage. The scale of today’s challenges is greater and, critically, the challenges are even more urgent. Executives recognise the criticality of efficient and effective business processes to company success and know also that processes must quickly change to meet new realities. Yet the shortcomings of the 1990s reengineering approach mean that it cannot be taken unchanged off the shelf for reuse. A new approach is needed that takes advantage of the best practice of 1990s reengineering, adds some new best practice learned since then, and provides a way that works today.

Let’s review the principles that underlie a new, rapid reengineering approach that is already proven to work in 2009:

Business value quickly – Whatever phrase you use to describe the cost/benefit comparison – return on investment (ROI), business value capture, investment payback – the cost/benefit of reengineering must be understood before the initiative begins. But this is nothing new – it was also true of old-style reengineering. What is new in rapid reengineering is that the ROI timeframe must be short. A period of months is too long to wait for value to emerge. Weeks, and preferably days, is the payback period that matters today. To paraphrase an executive to whom I spoke recently: “I’m not sure what I need, but I need it now!” This executive is not stupid – he’s just under pressure to show results quickly and doesn’t have the luxury of months to analyse his issues.

Early visualisation of result – Start prototyping immediately and move rapidly toward implementing the most beneficial solution your prototyping identifies. Develop an early visualisation of the result (within three days) and then build it ‘for real’ in a few short weeks (preferably days). Don’t spend weeks analysing your current processes or defining new ones. Adopt the ‘show me, don’t tell me’ rule – insist on seeing now how your future business will work and don’t rely solely on requirements documents, process analysis reports or graphical models to understand how your future business will work.

Agility of result – Implement business processes in a way that equips you to quickly change them when you need to. The processes you implement now must be open to rapid change; after all, your business faces market-driven change every day and if your processes are not agile you cannot respond effectively.

Agility of approach – Rapid reengineering does not assume that processes must be designed first and then implemented. Rather, it accepts that processes should be redesigned while they are being implemented. The traditional reengineering approach to change – typified by what is often called the ‘waterfall’ sequence of vision setting, analysis, design, testing, and finally, after months have elapsed, implementation – is simply unacceptable today. Continual, fast iteration lies at the heart of the new rapid reengineering approach. Ironically, some aspects of this fast-iterating approach were being developed in the 1990s, in the IT world under the auspices of a group called the Agile Coalition, while the Hammer-born reengineering wave was at its height. Now, the best elements of these ‘agile methods’ are being adapted to the task of rehabilitating process reengineering for today’s quick-moving world.

Drive innovation through internal competition – Consensus and collaboration have been cornerstone principles of almost every change initiative in the past 20 years. Now it’s time to add a dose of competition – not to undermine the virtues of consensus building and collaborative working, but to spark more innovative thinking, to undermine ‘lowest common denominator’ thinking, and to push the pace of change.

ASAP – A Proven Approach

Singularity is in business to populate the world with agile companies. Our clients use our rapid reengineering approach, branded ASAP and based on the principles above, to become more agile, quickly. ASAP packages the best practices of reengineering and agile methodologies and equips our clients to fuel innovation by unleashing the positive forces of internal competition. It also uses business process management technology as a delivery platform, to enable early visualisation of the result, support rapid implementation and add agility to processes. This approach is not just a new theory of how to make beneficial change achievable quickly for businesses – it’s practical and is proven to work today.

About the Author

Dermot McCauley is director for banking and capital markets at Singularity: www.singularity.co.uk

Know Your Risk

Tracey Cummings — Fri, 01 May 2009 17:52:00 GMT

Risk analysis is fundamental to effective risk management. Jacqui Griffiths asks how financial firms can ensure they get it right from the start

Financial organisations face a paradoxical situation when it comes to risk – they need to minimise it, but they can’t grow without it. In today’s economic climate, it is more important than ever to identify, measure and minimise risk in order to reap its attendant rewards. Alexander Millington, head of risk management software at Formicary, explains: “Financial organisations thrive on taking risk, but understanding and giving clarity to that risk is more important than ever in a complex trading environment.”

However, banks face many challenges in accurately assessing the risks they face, and there is consensus among the experts that risk analysis methods have previously fallen short. “How you value the risk is obviously key to determining the size of the reward,” says Michael Bush, head of product management at Business Control Solutions. “But how do you value risk that only has a ‘potential’ to take place?”

“Margin pressure in core business has driven many organisations to seek greater return in the capital markets, fundamentally carrying a greater risk to their business,” says Nigel Lee, chief commercial officer at Financial Architects (FinArch). “A failure to correctly assess risk and risk-adjust business performance has exposed these organisations, their customers and their shareholders.”

“Financial organisations are still searching for the appropriate balance,” adds Chris Moxon, chief executive officer of Methodware. “The herd mentality prevalent in many large financial organisations, driven by pressure to maximise profits, has produced a bias to ‘reward’ in spite of the associated risks. Controls applied in recent years have not been effective, and some banks have focused more on controlling small fraud exposures than managing advanced credit instruments or systemic institutional issues. Clearly, this needs to change.”

That change is on the horizon, according to Adrian Maconick, director of Finsbury Solutions: “We are in the middle of the biggest banking crisis in my lifetime,” he says. “This will trigger a complete re-evaluation of risk management which will cover the regulators, the role of government, the role and status of risk management in the organisation, the measurement of risk and the systems used to provide risk management information.”

“For many firms the number one issue right now is basic survival and recovery from their direct participation in or exposure to the credit crisis in all its forms, especially as it relates to the underlying securities risk,” comments Todd Stone, chief executive officer of ProcessUnity. “After that, managing and controlling both existing and new financial products and services is critical to all financial firms.”

Moxon agrees: “The two most significant issues facing banks in this context are institutionalising a risk management culture and obtaining a true enterprise view of risk,” he says. “Most financial managers and executives have never faced a business environment this challenging in their professional lifetimes. They need to increase awareness of proactive risk management practices and the discipline across the organisation. In conjunction with this, financial firms need the ability to take risks out of their individual business unit silos and understand the collective impact on the entire organisation.”

“At Formicary, we’ve found that making consistent information, particularly market information, available across the institution is a top priority now for firms,” says Millington. “The ability to provide coherent pricing and risk analysis rapidly, across systems, from audited information sources, is critical in providing a level of confidence that the information on which business decisions are made is accurate, across the board. But accurate information is nothing without the ability to report and analyse it. Providing straightforward, easy access to a flexible reporting framework enables business decisions to be based on timely data in a way that is relevant to the business.”

Perhaps it should come as no surprise, then, that even in these straitened times, analysts are predicting that risk management and compliance will be the area where most money is spent. “As we talk to our customers, the area where we consistently see spending is risk management and controls,” says Ian Warford, EMEA industry director for capital markets at Microsoft.

“Firms will now begin to increase investment in effective internal control and risk management on one hand, and meeting regulatory requirements on the other,” says Stone. “But they should take care not to overreact. Large, complicated, enterprise-wide risk management approaches will cause more harm than good. They delay the benefits of effective internal control, end up increasing risk, and cost a fortune at a time when financial services firms need to spend wisely.”

Warford concurs: “Customers know that additional regulation will be coming towards them – it always does after a period of financial turmoil. But they’re not looking to replace their systems – they’re trying to use what they have to address the processing problem around risk.”

Perfect Match

The good news is that the key to solving the risk analysis conundrum may lie in a simple, if wellthought- out, shift of focus that tallies exactly with the ethos of using existing technologies – the technologies that end users are already familiar with.

A major obstacle for banks has been their historical reliance on algorithmic techniques for risk analysis. As Lee explains: “The calculation of risk is difficult, and unfortunately not a science. Reliance on statistical models and the algorithmic exploitation of historic data has detached many organisations from sound judgement.” People across the enterprise can give valuable context to that data. Indeed, by returning their focus to their people, banks can efficiently nurture a context-rich, enterprise-wide risk culture.

“Most importantly, people need to be at the centre of risk management,” says Warford. “They need to have the tools to manage risk themselves. For example, instead of having a business intelligence group somewhere embedded in the IT department, everybody should be able to use business intelligence tools.”

“There’s no need to re-invent the wheel here,” adds Stone. “Most of the information is readily available. The trick is to establish the right relationships between this information and make it easily and widely accessible. There is more detail of course, but there is often more value in improving basic management visibility and transparency than in abstract risk engines.”

“Where formal transaction processing systems exist, it is relatively easy to extract data from these and use them to feed risk management systems,” adds Maconick. “The hardest problem is to find and extract data from the myriad of informal systems on spreadsheets and PC databases. Some people have suggested that all spreadsheets should be migrated to formal systems, but this is just wishful thinking – our work shows end user computing applications growing at around ten per cent per annum in most organisations. When a new product area emerges they have to act fast and rely on spreadsheets to process. The best way to deal with the problem is to embrace spreadsheets and other end-user applications, but make them acceptable by providing the right tools to manage and control them.”

“Risk analysis has a significant dependency on the underlying data and the analyst’s ability to access and aggregate it,” says Moxon. “The use of robust database technology and browser-based delivery channels allows easier access, and the flexibility of the risk analysis tool allows the best possible solution fit. Methodware’s flagship risk management solution, ERA, leverages Microsoft technology to provide a central, integrated repository that clients can configure according to their specific needs.”

Lee expands the point: “For a tool to be effective it has to be easy to use and familiar,” he says. “Microsoft provides the most prolific tool in the risk and finance function – Excel – and some of its partners have built risk and finance solutions that rely heavily on Microsoft. The Financial Studio product from Financial Architects is exactly this kind of platform. It is based on the finance resource planning concept, and has been developed by bankers for bankers. Financial Studio exploits Excel via Microsoft Reporting Services to provide information for both internal and external use in an environment which is both familiar and easy to use.”

“Two main capabilities are particularly relevant here,” adds Maconick. “Cataloguing, controlling and incorporating all types of data into the risk management systems is relatively easy in formal systems, as most are based on modern database systems such as Microsoft SQL Server. For end-user systems, an end-user computing control system such as Finsbury’s Spreadsheet Workbench is required. Once identified as providing business-critical information, the spreadsheets can be analysed and key cell data extracted for input into risk management systems. The second key capability is computing power – most risk management calculations require large numbers of scenarios to be calculated. This is an inherently parallel process, so technology such as high performance computing (HPC) is of significant value.”

Howard Travers, director of sales at Formicary, stresses the importance of including all methods of communication in risk analysis. “With the introduction of Microsoft Office Communications Server (OCS) R2 2007, firms are recognising the huge benefits derived from VoIP, presence and unified communications,” he says. “Firms continue to look for methods to streamline communication and retain knowledge, and recent additions to OCS such as Group Chat are going to make a huge difference. The biggest issue they face is making sure there are mechanisms available to accurately search and identify unauthorised conversations and information. This is why Formicary introduced ChatSeer, which is used by several tier-one investment banks to natively search instant messaging and Group Chat communications and help them ensure they are analysing the right information.”

It seems that in order to achieve a more accurate view of the risk/reward balance, banks must also strike a balance between people and technology; between the subjective context and insight that staff can offer, and the objective data that runs through their systems. Using familiar technologies not only helps put people at the centre of the risk culture, but can also create efficiencies in terms of resources, organisation and cost. “When it comes to cost, many people already have licences for SQL Server, PerformancePoint, and even HPC Server,” concludes Warford. “If financial firms deploy these technologies they can save a tremendous amount of money as opposed to buying new licences. Many firms are realising that they can save money by deploying the licences they already have. They’re trying to use what they have to address the processing problem around risk, and because the toolset is familiar to everybody who uses Microsoft Office, it’s a very compelling opportunity for them.”

Bad Economy or Not, Here Are Ten Reasons to Attend Convergence 2009

NickHoban — Mon, 09 Feb 2009 20:04:00 GMT

By: Mark Polino
Provided by: MSDynamicsWorld.com

Coming up March 10-13 in New Orleans is Microsoft Convergence 2009. Convergence is Microsoft's premier customer event for the Dynamics line of business, and it's one of Microsoft's largest conventions each year. A few people recently asked me why they should attend, given the difficult economy, and I was surprised that I quickly rattled off ten reasons why they should go. I'm sure that there are more but here are the ten biggest ones I came up with:

1. Learn how to get more out of your existing Dynamics program.
Plenty of sessions at Convergence provide you with tips and information for fully exploiting your version of Dynamics. This is important information for tough times and give you the chance to look like a hero when you return home with ideas for improving the efficiency of your current setup.

2. Learn about new features planned for upcoming releases.
The economy will turn around. When it does, people are going to want to know how to get ahead of the competition. Convergence can give you a heads up on all of the great new features in upcoming Dynamics releases, so you can better position your firm to compete.

3. Get Continuing Professional Education.
If you are a CPA or other professional who needs continuing professional education (CPE) credits, your company is probably going to pay for them anyway, poor economy or not. Why not get two -for-one by attending Convergence to learn about Dynamics and getting CPE at the same time?

4. Learn what works from other users.
You are not alone. You also don't have to figure everything out by yourself. There are thousands of users at Convergence, many of whom have been experiencing the same challenges as you. Convergence is the perfect place to ask questions and learn what works in the real world from real users.

5. Interact with product and support team members.
Many of Microsoft's product team support members make it to Convergence. Being able to ask them questions is a phenomenal opportunity. There is nothing like walking through a scenario, in front of the application with a support team member looking over your shoulder.

6. Attend parties.
Team Members and Partners are often more relaxed after the event. The social events are a great place to pursue some relationships that pay big dividends down the road. Don't underestimate this opportunity for networking. It's not frivolous. I've gotten some great info from clients who finally opened up after a few drinks, and I was able to get to the root of some issues that they were having.

Plus, your partner will probably buy you drinks. When was the last time that happened?

7. Try something new.
Hands-on labs at Convergence provide an opportunity to try out a product or process without worrying about setup, licensing or breaking something. If you've been wondering if a particular module would meet your needs, this is a way to figure it out quickly in a semi-structured environment.

8. Learn about Add-on Solutions.
One of the benefits of the Dynamics ecosystem is that it is rich in vendors with applications designed to enhance your solution. This is the perfect place to pull out a list of pain points and see if there is an add-on solution that meets your needs. It doesn't matter if your pain is related to compliance, tax, efficiency or something else entirely; there is probably a third-party solution for you.

9. Learn about related applications.
Convergence doesn't just cover the Dynamics applications. Related applications like SQL Server and the Microsoft Office products are covered as well. These products are an integral part of a Dynamics solution, and obtaining more information helps you better leverage your implementation.

10. Quick return on investment
If you learn one thing that saves you eight hours of consulting time, you've essentially paid for the entrance fee. If you learn how to save two hours a week, you've gained one day-month in productivity. What is that worth to you?

11. (Bonus) Me.
I'll be there presenting 50 Dynamics GP Tips in 50 Minutes. This is a fast-paced flight through 50 things you can do in GP tomorrow. There's plenty of new stuff from when I presented this at iSight and it's almost all live demo. Lots of backup detail will be provided for you take with you so you won't need to take notes, just sit back and enjoy the ride.

About the Author

Mark Polino is a Microsoft MVP for Dynamics GP and a Senior Consultant with I.B.I.S., Inc. Prior to his work with I.B.I.S., Mark was the Chief Financial Officer for Transit Television Network, Mark has been working with Dynamics GP and its predecessors since 1999. He is a Florida licensed CPA and holds an MBA from Rollins College

Guerrilla Job Search Tips – How to Find Jobs & Get Hired Faster in a Recession

NickHoban — Mon, 19 Jan 2009 22:46:00 GMT

By: David E. Perry & Kevin Donlin

In any economy, you can find a job faster by doing three simple things:

1) Know the position you want, with absolute clarity, right down to the job title.
2) Know where you want to work, right down to the names of 10-20 ideal employers.
3) Use unconventional “guerrilla” tactics to get noticed -- and get hired.

Here are the stories of two people who did all the above -- and found great jobs -- right in the middle of the current recession.

1) Anyone for Coffee?
Janet FritzHuspen from St. Paul, Minnesota, landed a job after mailing coffee cups to area employers.

That’s right -- coffee cups.

Here’s what she did …

FritzHuspen found jobs advertised online, then sent a box with a travel coffee mug, her resume and a cover letter inside. Her letter said, “I would like to meet you over coffee to discuss how I can benefit the ABC Corporation as your director.”

“I sent the box via FedEx Ground, so I could track and know when they signed for it. I waited about 20 minutes after it arrived. Then, I called and said, ‘Hi. You just got my package!’ and I went from there,” she says.

FritzHuspen sent three coffee cups in two weeks. “I called and spoke with somebody at all three employers, and had a conversation with one hiring manager that resulted in an interview.”

About two weeks later, FritzHuspen got the job!

Here are three ways to make this tactic work for you:

1. Find names and phone numbers of hiring managers on Google or Linkedin.com. Can’t get a name? Call and ask the receptionist -- that’s what Janet did. Then, she dropped the receptionist’s name into the first sentence of her cover letter, by saying, “I spoke with Sally Smith today about …” This instantly established a rapport with the reader. Smart!

2. Save money on shipping by using FedEx Ground or UPS. Speed is less important than real-time delivery confirmation -- you want to call recipients right after they open your box. This makes an incredible first impression!

3. You can buy travel coffee mugs for under $5 at any department store. So, for about $15, including shipping, you can get on the radar of almost any hiring manager you want to meet. What would that worth be to you?

2) Smart Calling

Gilbert Fonseca from Pharr, Texas, got hired for an insurance sales position very quickly after doing something simple and direct: He called an employer that was expanding, introduced himself, and asked for an interview.

That sounds like cold calling, right? Wrong.

Fonseca did several smart things first, before calling his future boss.

Through research, Fonseca learned his target employer was expanding. And, thanks to his prior job, he knew all about one of their key competitors. A call to company headquarters produced the name and number of the local hiring manager.

“I called the hiring manager and introduced myself. He wasn’t too eager to talk, but I did what any job seeker should do -- I sold myself,” says Fonseca.

Here’s what he said: “Good afternoon Mr. X, my name is Gilbert Fonseca, I live in Pharr, and I heard that you’re coming to our area. I wanted to introduce myself and explain how I know about you -- I worked for one of your competitors in the past.”

At this point, the hiring manager pushed back and tried to get rid of him. But Fonseca pressed on.

“I know how your products work and I have a big book of business I could bring with me,” said Fonseca. This got the manager’s attention -- who wouldn’t want to hire someone who brings his own customers?

“That’s pretty much where the conversation ended,” said Fonseca, who got the names of other hiring managers and was told to call them.

No interviews resulted, so Fonseca pursued other leads. But two weeks later he got a call. “The hiring manager said that things had changed and I was asked to come in. I interviewed on Tuesday and had the job on Wednesday,” he says.

Here are three things to keep in mind as you “smart call” for interviews:

1. Tell employers -- specifically -- what you’ve done before and can do again. Example: “I’ve saved more than $90,000 a year the last three years and can do the same for you.” Do your homework and assign a dollar value to any time you’ve saved or money you’ve earned.

Alternately, drop the name of a competitor they hate, a client they’d love to have, or something valuable you can bring -- that’s what Fonseca did. How can you help? Be specific!

2. Follow a script. It can ease your nerves to read from a piece of paper. Just be sure to practice until the words flow smoothly.

3. The worst that can happen when you call employers is … they say no. Nobody dies or goes to jail. But you may land a job interview. All you have to do is ask.

Chances are, you’ve never thought of sending coffee cups or “smart calling” employers. But these Guerrilla Job Search tactics work, as the stories above demonstrate.

Why not give them a try today?

About the Author

David E. Perry and Kevin Donlin are job-search experts with more than 35 years of combined experience in helping executives just like you get hired faster. To learn more and to download your Free Guerrilla Job Search Tips, visit - www.GM4JH.com

IT Gone Wild: How to be prepared for key IT employee departures

Liz H — Mon, 21 Jul 2008 15:13:00 GMT

By Lee Barken

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Sample Termination Policy.doc

MS Word Document
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Amy had that sinking feeling in the pit of her stomach. Like most CFOs, Amy (names changed to protect privacy) had a keen sense for observing behavioral changes in her staff. When her Information Technology (IT) director started to display the telltale warning signs of workplace discontent, Amy knew that something was wrong. “At first it was just harmless complaining, but over time, it was clear that Bart was pretty unhappy,” says Amy. She adds, “When Bart abruptly resigned with just three days notice, I quickly realized how vulnerable our company was to the departure of an IT director. Bart had all the keys to the kingdom.”

By definition, key IT employees are entrusted with a high level of responsibility and authority. With administrative system rights, a trusted user can have access to read and/or modify any file on any system. This includes payroll information, e-mails, trade secrets and other sensitive information. If a key IT employee suddenly leaves the company, will you be prepared to pick up the pieces? Even worse, if the departure is hostile, how will you protect your company from malicious IT attacks?

As IT systems have become pervasive around the world, companies now find themselves more dependent upon technology. The byproduct of this dependence is a critical reliance upon the IT personnel who manage and maintain the infrastructure. This means that a disgruntled IT employee has the potential to cause harm far beyond that of a typical worker.

Revenge of the Nerds

The motivation for IT sabotage can come from a variety of sources. IT staff may feel under-appreciated, or underpaid, or perhaps just have a score to settle. In 2002, when Roger Duronio, a system administrator for UBS Wealth Management, learned that he would not be receiving an annual bonus, he set in motion an elaborate plan to get even.

After quitting his job, Duronio, waited three weeks, then using his knowledge of the network infrastructure, he injected a logic bomb that took down 2,000 servers. The attack affected 370 branch offices and left 17,000 brokers without system access. Getting the system back up and running cost the financial services firm over $3 million. Duronio was sentenced to eight years in prison and ordered to pay restitution.

In 2007, Joseph Nolan, a system administrator for aviation firm Pentastar erased a hard drive containing company payroll and HR information following a disagreement over a severance package. Unlike simpler times where employee sabotage resulted in office pranks or starting rumors, today’s trusted IT employee can inflict lasting and permanent damage felt across the entire enterprise. Nolan received a four-year sentence.

Ethics in the Data Center

According to a survey by security website DarkReading.com, nearly one-third of respondents admitted to using system rights to peruse information they were not supposed to access at least once over their careers. In addition, ten percent revealed that they “abuse their security privileges on a regular basis.”

When presented with a hypothetical scenario asking what they would do if they found a list of employee names about to be laid off, 23 percent said they would sneak a peek. Even more disturbing, 8.5 percent indicated that they would not only peek, but they would also share this information with other people in the company.

Nobody wants to believe that their employees would succumb to unethical behavior. However, the reality is that CFOs have an obligation to be prepared and manage the risk of good employees gone bad. Effective corporate governance, like the Boy Scout motto, mandates that companies should “be prepared.” The first step is to develop a Termination Policy for High-Risk IT Employees.

What Could Go Wrong?

While most companies already have a formalized termination policy that governs employee departures, additional steps must be taken for high-risk IT employees. Beyond the typical procedures of returning of laptops, key cards and other company property, a few extra steps should be included:

1. Change all passwords. Upon departure, all passwords known by that employee must be changed, especially administrative and privileged accounts. In the event of a hostile termination, make sure that administrative passwords are documented and stored in a secure location. For example, seal administrative passwords in a tamper evident bag (used in evidence collection) in a locked safe. Secure password storage is essential not only for managing terminations, but also for effective disaster recovery. If key IT personnel are non-responsive in a natural disaster or crisis situation, having emergency use passwords available is an important part of any business continuity plan. This is especially important in smaller environments where administrative access may be limited to a single individual.

2. Update domain name registration records. Be sure that the terminated employee is removed from your domain name registration contacts. If this access is not removed, a malicious employee could change your Domain Name Servers (DNS) and cause your website and e-mail to be disabled or redirected. To check your domain name registration, simply enter your domain name (such as hwcpa.com) in a WHOIS search site, such as http://www.networksolutions.com/whois.

3. Secure wireless networks. Wireless networks present a unique risk because an attacker in the parking lot could potentially compromise a network and access resources as if they were plugged into an Ethernet jack inside an office. If your company uses WEP, WPA-PSK or any encryption method that relies upon static keys, you must be sure to change the keys. Even if the employee didn’t know the actual key, if it was configured on their laptop, it is possible to recover and decrypt the key from registry settings. Don’t forget to change the password protecting the access point’s management interface.

4. Update Vendor Relationships. Just as you would call a bank and remove somebody from a “signature card”, you must also contact all vendors and third party outsourcing partners to ensure that access has been removed for the terminated employee. This should include the company’s Internet Service Provider (ISP), website hosting provider, payroll provider, software vendors, maintenance providers and off-site storage providers (where your backup tapes are maintained). Does your company order office supplies, buy products or process shipments online? You should change passwords for any websites where a company credit card might be stored. In addition, don’t forget to review access lists if your company uses any Software as a Service (SaaS) providers, such as online backups, online meeting/collaboration services or CRM software.

5. Disable remote access. Make sure to disable any remote access accounts, VPNs or other tools that enable remote access. While rare in modern IT environments, you may also want to scan for unauthorized modems.

Minimizing the Risk

For Amy, the sudden departure of her IT director meant panic when servers crashed a few days later. Luckily, the former IT director agreed to come back and perform an emergency recovery. However, Amy knows that next time she might not be so lucky. “This time around, I’m having my new IT director write down everything. You know, just in case he wins the lottery and disappears next week,” she says with a smile.

Although it’s impossible to prevent every attack, CFOs are not powerless in the battle to reduce the risk posed by terminations of key IT employees. By developing and implementing policies and procedures for the termination of high-risk IT employees, companies can prevent last minute scrambling and improve the overall security posture of their IT environments.

About the Author

Lee Barken, CPA, CISSP, CISA, CCNA, MCP is the information technology practice leader at Haskell & White LLP (http://www.hwcpa.com/). Prior to Haskell & White, he worked as an IT consultant and network security specialist for Ernst & Young’s Information Technology Risk Management (ITRM) practice and KPMG’s Risk and Advisory Services (RAS) practice. Lee writes and speaks on the topics of clean tech, IT audit compliance, enterprise security, wireless LAN technology, and computer forensics. He is the author of How Secure Is Your Wireless Network? Safeguarding your Wi-Fi LAN (Prentice Hall, 2003), and Wireless Hacking: Projects for Wi-Fi Enthusiasts (Syngress, 2004). You can reach him at 858-350-4215 or lbarken@hwcpa.com.

Software-Plus-Services & Microsoft Dynamics

Editor — Tue, 20 May 2008 13:33:00 GMT

By Derek Cahill, VP Pointivity

Microsoft Dynamics software-plus-services approach provides customers with the flexibility and choice in how they use, buy, deploy, and manage their business processes such as marketing, sales, finance, and operations. Microsoft Dynamics is a fast growing community built upon a strong partner and ISV (Independent Software Vendor) network.

Traditional Microsoft Dynamics Deployment
Traditionally customers purchase Microsoft Dynamics (AX, CRM, GP, NAV, SL, etc.) from certified Microsoft Partners. Microsoft partners will install, setup, and customize Microsoft Dynamics onsite with dedicated hardware and infrastructure. The most appropriate delivery model is dependent on the unique characteristics of each company and its industry. While the traditional deployment/licensing model might be attractive for some customers, it represents several problems for others, including large up-front capital expenditures for hardware and infrastructure (network, security, databases, backup, etc.), ongoing management of hardware and infrastructure (difficult for non-technical clients) and the full purchase of licenses that they may or may not use year over year. These expenditures are compounded with yearly software assurance agreements, hardware break/fix costs and unexpected licensing changes.

Microsoft Services License Agreement (SPLA)
Many customers and Microsoft Partners are not aware but Microsoft now offers Microsoft Dynamics (AX, CRM, GP, NAV, SL, etc.) on a hosted subscription model or Services Provider Licensing Agreement (SPLA for short). SPLA enables service providers with a hosted offering to license Microsoft products on a monthly basis to provide hosted applications to their end customers. In fact Microsoft offers Exchange, SharePoint, Office, Dynamics, Performance Point and many other products on a hosted licensed model. With SPLA you inherit the hosted model and leverage the IT expertise of hosting companies.

Advantages of SPLA Licensing
SPLA licensing has many advantages over traditional purchase of Microsoft Dynamics applications including:

No Up-Front Capital Expenditures – Only pay for the hardware and software licenses you need. Pricing varies by partner, but a typical Microsoft Dynamics GP Business Essentials or Advanced Management module will be under $200 per user per month. Microsoft CRM is under $50 per user per month.
Pay As You Go – SPLA licensing allows you to add or subtract users as you go along, only pay for the Microsoft Dynamics licenses you need. You can even mix and match Exchange, Office, CRM and GP licenses to match your company needs.
Software Assurance Included – SPLA licensing includes all Microsoft Dynamics product updates year over year for the lifetime of the agreement. You’ll always have the latest product version under SPLA licensing.
Boost Employee Productivity – IT or department resources can focus on business operations and not on IT issues or application problems. Many companies often designate one or two internal resources as their main point of contact for all Microsoft Dynamics problems. These resources quickly lose productivity and focus from their core responsibilities.
Access Microsoft Dynamics over the Internet – Through SPLA licensing you inherit the ability for application hosting and can access Microsoft Dynamics applications over the Internet. This way your entire organization can work on Microsoft Dynamics and other Microsoft products while on the road, at home or from any office location.
Eliminate Hardware Issues – Hosting Microsoft Dynamics eliminates the need to have in-house experts on servers, infrastructure, security, networking, backup, etc. Most Microsoft partners and application hosting companies have staff with experts in each of these areas, plus 7/24 help desk, redundant Internet and power systems, high-end security systems and backup systems that your company may find difficult to afford.
Integration with 3rd Party Products – Many ISVs now support running their product on a hosted model with similar licensing terms to SPLA. Ask your ISV about a hosted solution instead of paying a large up-front licensing cost for their product.
Partners & ISVs – SPLA licensing is a win/win for customers, partners and ISVs. Partners and ISVs can focus more on customer services, minimize hardware and setup issues, and offer Microsoft Dynamics at a lower price point to their customers.
New Customers or Existing Customers – SPLA works great for new or existing customers especially customers who are upgrading to the latest version of Microsoft Dynamics or new customers who do not have the capital or the technical resources to support an onsite Microsoft Dynamics installation.

SPLA Licensing – What To Watch Out For
SPLA licensing is a great solution for most companies, but beware of these pitfalls when working with a partner on a SPLA agreement.

Data Center / Hosting Facility – Make sure your Microsoft Dynamics partner works with a leading application hosting company and has the staff, resources and policies in place to support your needs.
Public Companies – Make sure your data is stored in a SAS 70 Type II compliant data center which meets all SOX compliance guidelines. Also, make sure your data can be backed up for 7 years which will be a requirement starting in 2009.
3rd Party Products / ISVs - Make sure your third party products or ISV products are licensed or work in a hosted environment.
Virtualization – Hosted Microsoft Dynamics is currently not supported in a virtualized model only on dedicated servers. Make sure your hosting company provides dedicated servers and equipment for both the application servers and SQL database servers otherwise Microsoft will not support your installation.
SPLA Licensing – Microsoft reserves the right to change SPLA licensing once a year. But as this market expands and the industry battles over market share for the software- as-a-service market, I anticipate SPLA licensing to go down. As an example, this year the SPLA licensing for Microsoft CRM went down by more than 50%.

The IT environment is quickly evolving. New terms such as virtualization, software-as-a-service, utility computing and cloud computing are evolving into solutions. Just as a company may outsource their payroll services, legal services or other business processes, companies are now turning to IT companies to outsource their basic IT services. There is no way a company can keep up with the changing IT market and all the specialties such as networking, security, hardware, software, operating systems, databases, backup, software applications and more. That is why companies can benefit from Microsoft’s Software Plus Services and licensing products via Microsoft’s SPLA licensing program. Using SPLA licensing, companies can eliminate up-front capital expenditures, pay for only the licenses they use, eliminate IT hardware issues, boost employee productivity and access Microsoft Dynamics products over the Internet.

Microsoft Dynamics & SPLA Licensing – Links and Notes
http://www.microsoft.com/dynamics/softwareplusservices.mspx
http://www.microsoft.com/serviceproviders/licensing/default.mspx

About the Author

Mr. Cahill has worked for both Fortune 200 and high-growth startup companies. Mr. Cahill was previously CIO of a public biotech company and founder of OnDemand Business Software, a company devoted to delivering Software as a Service (SaaS) to small and midsize companies. Currently, Mr. Cahill is Vice President of Pointivity, a leading application hosting and managed service company located in San Diego, California.

Part I: Securing your Data and Systems

Editor — Tue, 22 Apr 2008 22:09:00 GMT

By Thomas G. Stephens, Jr., CPA, CITP
Originally published in Accounting Network News

Information security remains a challenge for accountants in all walks of the profession. As accountants, most of the information we work with on a daily basis is sensitive and, as such, requires professional due diligence to protect that data. In fact, for the sixth consecutive year, information security was named as the technology initiative expected to have the greatest effect in the upcoming year, according to the American Institute of Certified Public Accountants’ 2008 Top Technology Initiatives survey.

In Part I of this multi-part series, we will address several fundamental aspects of securing your data and systems – the importance of policies, effective passwords, and email security.

It Starts With Policies

Underpinning the concept of information security are policies that every organization should have in place to ensure that each team member fully understands his role and responsibility in securing the organization’s data. Examples of these policies include anti-virus policies, encryption policies, password policies, and remote access policies. An anti-virus policy, for example, should address issues such as the minimum required length of passwords used to access corporate networks, the complexity of such passwords, and the frequency with which passwords must be changed.

In the absence of clearly-communicated policies, team members don’t have the guidance necessary to effectively and consistently apply security settings across the organization. Fortunately, there are numerous resources for such policies so that these do not have to be created from scratch. The SANS Institute is one such resource. The SANS Security Policy Project is an excellent resource for the types of policies required to successfully secure organizational data; sample policy templates are accessible at http://www.sans.org/resources/policies/.

Passwords Are Key

With the fundamental policies in place, the next step in securing an organization’s data is to ensure that appropriate passwords are in place so as to limit unauthorized access to systems and the data on those systems. These passwords must possess certain characteristics in order to be considered “strong.” These characteristics typically include:

A minimum of eight characters, though 10 or more characters are preferred
At least two alpha characters (mixture of upper and lower-case), two numeric characters, and two special characters
Do not include a person’s name or word found in a dictionary
Changed at least every 90 days and not re-used

Because of the complex requirements outlined above for strong passwords, many users find complying with these requirements to be exceedingly difficult. As such, many new tools have appeared to assist users in managing complex passwords. Examples of such tools include software applications such as Password Depot and RoboForms. In addition, USB keys such as IronKey are becoming increasingly popular as mechanisms for managing passwords. Both the software applications and hardware devices tend to operate by encrypting stored passwords using high-grade encryption algorithms, allowing complex passwords to be saved and automatically recalled when logging into an application or website.

Protecting Email

One of the largest issues facing accountants from a security standpoint is that of email. By nature, email is a highly unsecured medium of communicating with others. Unless proactive measures are taken, email messages and their attachments can be viewed by prying eyes. Accordingly, accountants have a professional responsibility to ensure that confidential data are not inadvertently disclosed in unsecured emails. Key strategies for securing email and email attachments include:

Using Microsoft’s Information Rights Management (IRM) tool to control who can open an email message and what one can do with a message once it is opened. IRM is a component of Microsoft Office 2003 and Microsoft Office 2007.
Encrypting with passwords any email attachments. For instance, if sending a Microsoft Excel 2007 workbook as an attachment, adding a password required to open the workbook encrypts the workbook with 128-bit encryption, making it almost impossible for a hacker to intercept the attachment.
Using a tool such as Hushmail to encrypt the entire email message. Hushmail provides private and secure email accounts. These accounts can be established at no charge at www.hushmail.com. Another tool to consider along these lines is PGP Enterprise (www.pgp.com).

Additionally, for those who are connected to Exchange Servers, using Remote Procedure Calls over an “https” connection ensures that email sent within an organization will remain secure within that organization’s domain. This is a configuration setting available to users of Outlook 2003 and Outlook 2007.

While there are no absolute guarantees with respect to data and system security, a few practical steps can help to mitigate an organization’s risk of unauthorized access to critical data. The techniques discussed in this article – policies, passwords, and protecting email – are easy to implement and pay off with enhanced data and system security.

Next month, strategies such as whole-disc encryption, anonymous web browsing, and anti-virus and malware protection will be reviewed as a means of further securing critical information.

Mr. Stephens is a shareholder in K2 Enterprises, where he develops and presents technology-related continuing professional education programs to accounting and finance professionals across the United States. You may reach him at tommy@k2e.com.

Excel 2007: Protect Sensitive Data In Your Documents

Editor — Tue, 22 Apr 2008 21:44:00 GMT

By David H. Ringstrom, CPA
Originally published in Accounting Network News

Your spreadsheets might contain more personal or confidential information than you realize. Such data often reside in the nooks and crannies of your spreadsheet, such as in the Properties window, or in overlooked hidden rows, columns, or worksheets. Fortunately the Document Inspector feature in Excel 2007 allows you to scan for and eradicate such information with just a few clicks of your mouse. I’ll show you how in this article, and will also discuss the Remove Hidden Data tool for Office XP and Office 2003 users.

Try it now: A free 60-day trial of Office 2007 is available for immediate download. Note that you can instruct the installation program to leave your present version of Office intact so that you’re free to work in either version. Or, try the online test drive.

Transition tools: Office Online offers an online command reference that shows where your favorite Excel 2003 commands reside in Excel 2007. You can also download and install the command reference tool on your computer. Yet another option is to add the Get Started tab to your Excel 2007 ribbon — this puts numerous training aids right at your fingertips.

Introducing the Document Inspector
This feature — also available in Word 2007 and PowerPoint 2007 — allows you to scan your documents for information that you might not want to share with others. It’s easy to get started:

1. Open the spreadsheet that you wish to scan.

2. Click the Office button, choose Prepare, and then Inspect Document.

Protected Worksheets: You cannot initiate the Document Inspector from a protected worksheet. If the Inspect Document choice is disabled, either activate an unprotected worksheet, or click Unprotect Worksheet in the Changes section of the Review tab of the ribbon.

3. You may be prompted to save your document, as shown in Figure 1. It’s always best to run the Document Inspector on a separate copy of your document, so that the original remains intact.

Figure 1: Be sure to save a copy of your original document, as certain changes by the Document Inspector cannot be undone.

4. As shown in Figure 2, the Document Inspector allows you to scan seven categories of content. You can clear the checkboxes for any categories that you wish to omit. When you’re ready, click Inspect.

Figure 2: You can choose which areas of your spreadsheet to inspect.

5. After the inspection you’ll see results for each category, as shown in Figure 3. At this point you have a couple of options:

Figure 3: The Document Inspector provides summary level inspection results.

• Click the Remove All button for any category. The Document Inspector only alerts you to the presence of personal or possibly confidential data, so you may wish to close the Document Inspector and determine what will be removed.
• Click the Reinspect button to repeat the document inspection, perhaps after using the Remove All button(s) to eliminate personal or confidential data.
• Click the Close button to dismiss the Document Inspector window.

Understand the Categories
The Excel 2007 Document Inspector searches for the following types of information:

Comments and annotations – You’ll usually know that a spreadsheet contains comments — such cells have a little red arrow in the upper-right-hand corner. However, it’s possible to obscure comments by hiding the indicator:
1.      Click the Office button, and then choose Excel Options.
2.      Choose Advanced, and then scroll down to the Display section.
3.      Choose No Comments for the “For Cells with Comments, Show” option.

Change Annotations: The Document Inspector also includes comments automatically added by the Track Changes feature within Excel.

Document properties and personal information: Certain authorship properties are set automatically when you create new documents:
1. Click the Office button, and then choose Prepare, and then Properties.
2. As shown in Figure 4, your name may appear in the Author field. It’s easy enough to clear this field and think that your work is done — but it isn’t.

Figure 4: The initial Properties window shows your name, but not other potential personal data.
3. Click the Document Properties button —just above the Author field — and choose Advanced Properties.
4. Click the Summary tab, and erase your company name if it appears within this window, as shown in Figure 5.

Figure 5: The Properties dialog box provides access to all document properties fields.

Custom XML data: Advanced users can store additional document properties in custom XML data that is not readily visible, but can be retrieved by others.
Headers and footers: Headers and footers within a worksheet may contain seemingly benign information, such as your name or your company name.
Hidden rows and columns: The Document Inspector alerts you to the presence of hidden rows and columns. You can click the Remove All button to delete the hidden rows or columns, but doing so may compromise the integrity of your spreadsheet. It’s typically best to remove hidden rows or columns by hand.
Hidden worksheets: You can hide worksheets within your workbook by choosing the Format command within the Cells section of the Home tab. Under Format choose Hide & Unhide, and then either Hide Sheet or Unhide Sheet. As with hidden rows or columns, it’s usually best to remove these manually, although the Document Inspector can do so with just the click of a mouse.
Invisible content: Any object that floats above the worksheet, such as charts, shapes, clip art, macro buttons, etc. can be hidden. Even if you’re the person that hides the objects, you might later forget about the hidden content. To demonstrate, I’ll show you how to add an object, and then how to toggle its visibility property:
1.      Choose Shapes in the Illustrations section of the Insert tab within the ribbon.
2.      Choose the first rectangle shape, and then draw a rectangle on your worksheet — simply hold down your left mouse button, draw the rectangle, and then release your mouse.
3.      Once you add the rectangle, the Drawing Tools Format tab should appear automatically in the ribbon. Choose Selection Pane from the Arrange tab.

Alternative: You also access the Selection Pane by choosing Find & Select within the Editing section of the Home tab. Choose Selection Pane from the resulting drop-down menu.

4. The Selection and Visibility pane shows you a list of all shapes on the current worksheet. You can use the Show All and Hide All buttons at the bottom of the pane to control visibility of all shapes at once, or click the box that appears to the right of each object. For instance, in Figure 6 Rectangle 5 is hidden, so the box is empty. However, Chart 2 is visible, so the box contains an eye. This allows you to hide or unhide objects as you wish.

Figure 6: The Selection & Visibility pane allows you to hide or unhide objects.

Handle With Care
Although it’s a helpful tool, keep in mind that the Document Inspector only alerts you to the presence of personal or sensitive data. In some cases you could damage your spreadsheet by allowing the Document Inspector to remove columns, rows, or worksheets. Further, the Document Inspector can’t notify you of every possible data breach — only a careful review by a human can offer that assurance. For instance, the Document Inspector won’t notify you of these instances:

One object, such as a chart or text box, obscured by another object floating above it.
Cells formatted as hidden.
Cells with a font color set the same as the worksheet background. For instance, users sometimes set the font color of certain cells to white to obscure certain areas of a spreadsheet.

Customizable: You can create custom modules that allow the Document Inspector to identify other types of sensitive data within your spreadsheets.

Protect Office XP/2003 Documents
Office XP and Office 2003 users can install the free Remove Hidden Data tool to remove personal data from their documents. The tool isn’t as robust as the Document Inspector — you can’t set any options — but it does provide a log file of the types of data that was removed. Once you download and install the tool, a new Remove Hidden Data command will appear on the File menu in Excel, Word, and PowerPoint.

The views and opinions expressed in this column are those of the author and do not necessarily reflect the opinions of Microsoft.

Is Reaching for the Moon Possible Anymore?

Liz H — Mon, 10 Mar 2008 00:10:00 GMT

Developing a High Performing Workforce of the Future
By Pam McGee

Content Provided By

The Partner Channel is a “go to” advertising and marketing resource that works creative magic for members. As members of The Partner Channel, Partner organizations reach beyond their marketing needs to the building and support of a Partner community where ideas and knowledge run rampant. Learn More

Remember when it was revolutionary to wear jeans to work? Remember when it was innovative to have a flexible work schedule so you could go to your son’s baseball games? Remember when it was extremely left-wing when employees were put in charge of their own schedules? Remember when it was completely irrational to have an employee work from home? Remember when it was almost impossible to allow employees to see company financial information because it was normally only shared with top management? Remember when it was a big thing to have a virtual team? Those are questions that shaped yesterday’s workforce. To remain competitive, there is a new set of questions to answer.

The questions of tomorrow are partially influenced by the fact that for the first time in 100 years, there are four generations in the workforce. With an aging population leaving a gap in leadership, succession planning is epidemic in nature. There is more software driving decisions, connecting people, and changing the way work is done. The latest estimate is that there is 10 times the software in the workforce than even two years ago. Facebook (http://www.facebook.com/) has become a common social networking expectation for some. There is an ever present drive to go global for everyone, not just the big corporations. Individuals can go global because of the flattening of the world. The growing new American population needs to find work and have their skill set developed. There are more women in the workforce than men. So as the complexity continues to build, how does a business owner create a workforce that is inspired, engaged, and highly productive? Is it even possible? Can you reach for the moon on this one?

Companies everywhere are adjusting to the new work environment. For example, the city of New York has developed a generations training program to help create awareness among it employees on the differences and similarities of fellow employees in the workforce. One company invited employees’ parents to its new employee orientation. The reason was that the 18 to 24-year-olds have a larger dependence on their parents than preceding generations. This generation also lives at home longer, so there may be another incentive for parents to be ultra involved in their job search. Another company utilized Facebook as its primary means of connecting virtual employees. The added benefit is that they had access to non-employees listed on individuals’ Facebook sites. Their pool of knowledge just expanded without the burden of payroll.

In addition to these examples, here are a few suggestions that business owners can consider as they pave the way for their future to engage and inspire their workforce:

Appreciate Similarities and Differences With the Four Generations
Recent research by The Robertson Company and pMcGee & Co. found that all generations predominately shared the same top five desires for their workplace; however, they had a different order of priority. Appreciating each other requires a paradigm shift and expectation that not everyone should work the way we do. “Shoulding” others should stop in the workplace.

Create a Respectful Work Environment
From the same research, the number one workforce expectation was to be respected. Focus groups were conducted to dig deeper into what “being respected” meant. Believing that most people don’t intentionally go to work with the motive of being disrespectful, the research indicated that disrespect came from having a double standard, having prejudices against each other, not respecting and valuing opinions from all age groups, and requiring people too great a workload. An example of having a double standard was when a manager told younger new employees that they had to earn respect, but then didn’t send the same message to older new employees. An example of prejudices is best seen when viewing popular media about the younger generation. They have them plagued as the “lazy” generation. They appear to be all pierced and “Ipod’d.” It is also a deep-seated prejudice that the “older” generation is non-technical. They are seen in pictures with their clipboards, outdated cell phones, and leather-bound date planners. Neither situation is entirely true. Prejudices run deep and wide. The most exasperated layer of disrespect is creating a work environment where everyone continually does “more with less.”

Redefine Team
Another key aspect of the workforce research was that different generations have different perceptions about team. The baby boomer era used teams as their social network. They invented the company softball team; they enjoyed company retreats. The majority of their social life came from their work life. The younger generation defines teams by the projects they work on. They connect with many teams based on their situation. One individual, when asked what she thought of her team, replied, “Which one? I am on 21 different teams.” They want teams to be a tool to get work done more quickly so they can move on to their next thing. Teams and team building need to take on a different focus and dimension.

Rethink Work Schedule
One of the most challenging aspects in the workforce is there are two huge groups of employees demanding a less than traditional schedule. This is beyond flexible scheduling – that was an assumption similar to an employee having a phone and a computer. The scheduling challenge is figuring out a more results-based culture that focused less on who was where, when and how much office time, client time, or E-mail time an employee had. For example, there may be an opportunity to tap into the almost retired work group. They may demand a work schedule that is “six months on and six months off.” A business owner may be saying, “That will never work with my business.” Remember, there were also some preliminary predictions that virtual teams would never work.

Engage and Inspire
There was a constant expectation from all ages to be included, engaged, and inspired. There was some unconventional thinking that businesses need to reverse. The thinking went like this – “when times are tough, companies dump employees (aka layoff, downsize).” In reverse thinking, employees have adopted that same thought pattern – “when times are tough, I dump you.” Creating an engaging and inspiring work environment does not have to be difficult, lofty, or programmatic. It’s about the little things a company does. Do they trust their employees or run them through the policy mill? Do they include them in discussions about the big picture of the company? Do they give them the tools to win in their job? Do they support them when they fail? Do they encourage personal fulfillment even if it doesn’t directly relate to the job?

Conduct Company Surveys
Staying on top of the workforce climate takes diligence, open mindedness, and follow through. Most companies wouldn’t dream of NOT surveying their customers. The same philosophy holds true about surveying your employees. There may be a belief that you have an open door policy and your employees talk to you. That is wonderful in the anecdotal sense. But there is some greater level of learning that occurs when a company routinely assesses their employees for what is working and what is not. The systemic approach allows the business to notice trends and patterns. It also creates a more objective approach to solving company problems. It certainly avoids the “squeaky wheel” syndrome.

Although the way has yet to be fully paved, there are a number of things you can do today to enhance your company’s ability to attract and retain the best employees. We are overworked, underfed, and “on” 24/7. Yet done correctly, you can expect more, maximize productivity, and improve loyalty in your workplace across all generations.

About the Author

Pam McGee has been speaking publicly and consulting for over 15 years. She has delivered speeches, executive coaching and business consulting in over 22 countries for companies ranging in size from 10 people to 100's. Through her engaging and authentic discussions, she challenges her audiences to new thought processes, business trends, and people impact opportunities. Pam is a Business Consultant and principle of McGee & Co. that helps businesses with strategic planning, change management, leadership development and creating innovative environments. Pam is a member of the faculty at Minnesota State University - Moorhead where she teaches project management and leadership skills. Prior to forming her consulting firm, she worked for Microsoft in leadership development roles, business management roles, and organizational consulting roles. In her eight years at Microsoft, she was consistently praised for her ability to coach senior managers on a variety of business topics ranging from business and industry trends to personal leadership. Through these challenging times, Pam's main goal was always to keep these leaders working toward being great leaders and strategic thinkers. Most recently, she worked with the Microsoft Corporate Vice President of Marketing in the role of Business Manager. This role involved working side-by-side to manage the business management processes, global marketing activities, and all forms of communication for the Vice President. Prior to Pam's time at Microsoft, she assisted in the operation of - a trucking firm and a restaurant venture - as well worked for a Fortune 100 company as a sales manager. Pam has also been an Assistant Professor for the North Dakota University System. She lives in Fargo, ND with her husband, Scott and their two children, Isaac and Erika. Pam Mcgee Leadership Consultant

Plain Language in Business

Jenn Hass — Sun, 09 Mar 2008 23:51:00 GMT

By Roy Jacobsen

I’ve always believed the maxim “If something sounds too good to be true, it probably is.” But now I find myself telling you that there’s something simple you can do that will boost your bottom line. One fundamental, uncomplicated thing that will:

Streamline procedures and paperwork
Improve employee productivity and moral
Reduce training time
Boost customer satisfaction
Increase sales and improve your company’s position in the marketplace

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What is “it?”

“It” is using plain language. Plain language is a set of practices based on the idea that the audience—customers, business partners, or employees—should be able to understand a document the first time they read it. Think about all the documents your business produces: customer letters, employee manuals, financial disclosure documents, legal contracts and notices, or anything else, printed or electronic. All of them can be improved by following plain language guidelines.

The evidence is overwhelming: plain language can have a huge positive impact on business. Studies in businesses and government agencies have shown that plain language saves time and money, and it improves understanding. And most importantly, almost everybody prefers plain language.

Watch your Language!

Just think about the business communications you read or hear every day. This includes E-mail, presentations, whitepapers, reports, proposals, contracts, billing statements, license agreements—the list is endless. Was the message immediately clear? Or did you have to review it a few times, wading through the jargon, business-speak, and legalese, to figure out what they were trying to say? Did it have a warm, human, conversational tone? Or did it come across as something composed by the computer HAL 9000, from the movie 2001: A Space Odyssey?

“Jargon, wordiness, and evasiveness are the active ingredients of modern business-speak,” according to the authors of Why Business People Speak Like Idiots. This is troubling because our ability to conduct business depends on our ability to communicate. Unclear, ineffective communication is to business what square wheels are to NASCAR.

Most people don’t use murky language deliberately. We usually fall into it because that’s what we see modeled all around us. “Everyone writes this way, so this must be how it’s done.”

Just because “everyone does it that way” doesn’t mean that you have to.

Benefits of Plain Language

Okay, plain language sounds good on the surface, but is it really that much better? Isn’t there a good reason for the traditional language of business? Well, there are many reasons why the traditional way of writing is the tradition. But “it works better” is not one of them. Researchers have recently started comparing plain language to traditional language, and in every case, plain language comes out the clear winner.

Many of the studies of the benefits of plain language examine it in one of two ways: the benefits to the company, or benefits to the reader. Let’s look at a few examples of each.

Both the United States Army and Navy have studied the effect of writing business memos in plain language, and both found that plain language is better. The Army found that people who receive memos written in plain language are twice as likely to comply with the memo on the day they receive it. The Navy found that plain language memos take 17% to 23% less time to read, with significantly greater comprehension. “Time is money” is a fundamental business axiom, and the Navy estimated that, if all memos were written in plain language, their yearly cost savings (in time saved) would range from $250 to $350 million.

The “Time = Money” equation shows up in other areas as well. In the early 90s, Federal Express (now known as FedEx) revised its operations manuals using plain language guidelines after finding that readers who used the old manuals took an average of five minutes to find information, and they found the correct information only 53% of the time. With the new manuals, the average search time was 3.6 minutes, with an 80% success rate. They estimated that this effort was worth $400,000 annually in time saved. And that doesn’t take into account the savings from employees getting the right answers the first time.

Here are more examples of plain language having a direct impact on a company’s bottom line:

In 1991, the Allan-Bradley Company (now a division of Rockwell Automation), rewrote their computer manuals in plain language. This reduced calls to their call center from more than 50 a day to less than two a month.
British Telecom revised their billing statements in 1997 and found that it reduced customer calls about phone bills by 25%. Furthermore, customers paid more promptly, improving cash flow and reducing collection costs.

Other studies have found similar savings, along with reduced error rates on business forms, improved retention for staff training, reduced paperwork, and increased efficiency. All of these will boost profit margins.

What about the audience? What benefits do they receive?

Some of the studies I already cited showed improved comprehension; the readers got the intended message the first time around. The Navy study, for example, found that readers understood the plain language memos better than those written in traditional “bureaucratic” language. Other studies have found this as well. For example, the Veterans Administration tested some of their form letters. Only 44% of the veterans who received the traditional versions understood them. When they rewrote them in plain language, that number rose to 89%. In addition, the average reading time went from eight minutes to six.

Researchers who have studied this have found that readers overwhelmingly prefer plain language. When the Ford Motor Company tested a plain language version of the owner’s manual for the Taurus, 85% of the respondents preferred it to the other version.

The preference for plain language carries over into specialized documents, such as financial disclosure documents and legal documents. For example, the U.S. Securities and Exchange Commission tested a plain language “profile prospectus” against the traditional model. Experienced investors overwhelmingly preferred the plain language version.

Joseph Kimble, a professor of legal writing at Thomas Cooley Law School in Michigan, and the author of Lifting the Fog of Legalese: Essays on Plain Language, has found that judges and attorneys prefer plain language to traditional “legalese.” Kimble points out legal language infiltrates business documents, such as contracts, licensing agreements, billing statements, and so on, even though it really isn’t necessary. “You can bet that many of those are influenced by the legal department, who won’t let this stuff get out to the public unless it’s written in legalese. And it just doesn’t have to be.” Plain language does the job more effectively.

Plain language doesn’t just help your company and your audience. It can help you in several ways as well.

First, trying to write clearly helps you think more clearly. Brian Fugere, one of the authors of Why Business People Speak Like Idiots, and a partner at Deloitte Consulting, says, “Clear language forces you to think harder about what you’re saying. A lot of what we see is the result of people not really getting clear in their own heads what they’re trying to say.” (I have found this to be true for my own writing. If my words are murky, it’s usually because I’m not sure exactly what I’m trying to say.)

It also gives you a wider audience. Fugere says, “If you start experimenting with clear language, you find that people pay attention.” He cited his own experiences as a consultant. The studies I already mentioned support that contention. People are more likely to read, and understand, messages delivered in plain language.

Studies have also shown that people who use plain language are viewed more positively. Most people think “straight talkers” are more likable, friendly, energetic, inspiring, and enthusiastic.

And the most important benefit comes back to the bottom line: People are more likely to take action when you use plain language. Plain language gets results.

Plain Language Principles

Plain language isn’t a set of rules or a list of words to use or not use. It’s a set of principles for writing to convey our ideas clearly, accurately, and economically.

Start with your readers’ needs in mind. Tell them what they need to know, using the words they use, but don’t bog them down in extraneous details.
Use familiar words—ones that are simple, direct, and human. Call a shovel a shovel, not a human-powered excavation implement. This doesn’t mean you can’t use specialized language or jargon. If there is a clear and well-known term that best expresses your idea, and your audience knows that term, then go ahead and use it.
Express actions with verbs; don’t convert them into abstract nouns. Don’t utilize things, and for pity’s sake, don’t write about their utilization; use them. William Zinsser, in On Writing Well, advises us to “…remember that readers identify with people, not with abstractions like ‘profitability’ or with Latinate nouns like ‘utilization’ and ‘implementation,’ or with inert constructions in which nobody can be visualized doing something: ‘pre-feasibility studies are in the paperwork stage.’”
Use active voice more. Write sentences that describe actors performing actions (rather than states of being). “A foolproof method for roadrunners to be captured by hungry coyotes has been developed by Acme researchers” is passive. “Acme researchers have developed a foolproof method for hungry coyotes to capture roadrunners” is active.
Relentlessly cut unnecessary words. At this point in time is just a long-winded way of saying now or currently, and there are hundreds of other bits of baggage cluttering business communication. Not only do they waste your audience’s time, they sap your message of its power. It took only 270 words to deliver one of the most powerful speeches in American history: Abraham Lincoln’s Gettysburg Address.
Don’t be afraid to use personal pronouns. Address your reader as “you,” especially if you’re writing instructions. A sentence like “The completed form must be submitted before the application can be processed” doesn’t say who is supposed to do what. “You must complete the form and submit it to us before we can process your application” is clear and direct.
Simplify. Break long, complex sentences into shorter, simpler ones. Aim for more short paragraphs than long ones. This doesn’t mean that you have to write in a “See *** run” style. It means you should be sure you’re not trying to cram too many ideas into a single sentence or paragraph.
Give your document a logical structure, and make that structure visible. Divide things into short sections, with lots of headings (and subheadings, if necessary). Put an executive summary, purpose statement, or table of contents at the beginning. People will often skim a document for its key points before reading it, so make them stand out.

These ideas will get you off to a good start. There are also tools that can help. For example, if you struggle with business buzzwords, you can install Bullfighter, a free tool for Microsoft® Office Word 2003 and PowerPoint® 2003. It scans your document for offending words and offers plain language alternatives. It also calculates a readability score for your document, using the method invented by the late Dr. Rudolph Flesch, a pioneer in readability research. You can download Bullfighter from www.fightthebull.com.

(Full disclosure time: I scanned an early draft of this article with Bullfighter. My document’s “Bull Index” was 98—not quite bull-free because I had one instance of utilize—with a Flesch Readability score of 52. Bullfighter said that my writing is “mostly clear, with some unnecessarily long words and sentences. You get to the point, although with an occasional detour. Most educated readers will navigate the text with no difficulty. Longer words and sentences appear occasionally.”)

Plain language doesn’t have the cachet of the latest business fad being promoted by someone trying to push his book up the business bestseller list. But it does have reams of evidence that prove its worth to your company, your customers, and to you. And it doesn’t take an army of high-priced consultants to apply to your business, either. All it takes is the will to spend some time and effort, and the willingness to learn how to use words well.

About the Author

Roy Jacobsen is a freelance writer and editor with more than 20 years experience in a variety of fields, including a 13 year career with Microsoft Business Solutions. He’s also a contributing editor for The Editorial Eye, a resource for writers, editors, designers, project managers, communications specialists, “and everyone else who cares about contemporary publishing practices.” Roy’s weblog, Writing, Clear and Simple, is at http://rmjacobsen.squarespace.com/.

War and Peace: The Business of Business Partnerships

Editor — Mon, 18 Feb 2008 19:40:00 GMT

By Bonnie Robertson

Shocked, confused. A premier client of five years cancels a contract worth $450,000. A call to the client, and the response is “we didn’t cancel it; we just signed it under your new company.” But I don’t have a new company…what are they referring to? A rapid review of the financials reveals a near $100,000 in cash drain for expenditures that do not make sense and were not planned for. What is happening? I already know the answer but don’t want to face it. My business partner of six years, whom I trusted explicitly, built a dream with, solved problems with, even shared clothes between our kids with, had done the unthinkable.

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A business partnership gone bad is professionally, emotionally, and financially a devastating challenge from which to recover. But I was fortunate, the need for a partnership split was clear, and our partnership documents gave me clear direction and legal capability to do what needed to be done. The decisions were evident, although still devastating.

More than a decade later, writing these words still leaves a knot in my stomach. But I am not alone. Statistics show that business partnerships amongst entrepreneurs have a fallout rate higher than marriages in this country. It is estimated that two out of three of all business partnerships break up within the first five years. The risk is enormous. The recovery is costly.

But this is not to discourage all business partnerships, for there are positive stories in that one third that makes it. Bob and Ray have been business partners for more than 30 years. They have had some ventures that turned out better than others. They have had issues to resolve between them. They live in different cities, making communication around business decisions more of a challenge. All in all, it has been financially, mentally, and emotionally a rewarding experience with great returns. What is different? Why is it that so many entrepreneurial partnerships fail while so few live up to their vision and promise? These are questions I have been asking of entrepreneurs for years, and while human relationships are complex and are rarely understood in simple terms, there are some basics that can increase the probability of success and mitigate the risk of failure.

Why Take on a Business Partner?
The first question every entrepreneur needs to ask themselves is “why do I want to take on a business partner?” There are only two right answers: 1. Competency and/ or 2. Capital.

Competency
When your business vision requires expertise, knowledge, and skill to fulfill, sharing the burden with someone who has these capabilities can expedite growth and improve chances for success. It is important that someone with the competency to fulfill the work also has both the competency to help run the business and the stomach for the risk. If that’s not the case, it would be better to fire someone and take the risk yourself. Firing someone, although not easy, is far less painful than dissolving a partnership.

Capital
Building businesses requires money for start-up, expansion, and rides through the rough times. If there is a potential partner who would like to invest in the business for the opportunity for a return, it can be an effective way to generate capital. Be clear however, on what that return is expected to be and when. Often times the optimism of visionary entrepreneurs can distort the reality of cash needs. Plan together carefully and conservatively. If the return comes faster than anticipated, that will be a fun problem to solve.

Companionship
Unfortunately, many entrepreneurs choose to take on a partner because of a need for companionship. It gets lonely chasing a vision. Your family and friends get tired of hearing about it; no one else quite understands the possibilities and opportunities. Creative entrepreneurs find themselves in a search for someone who understands, who can be as impassioned about their dream as they are. They long for someone to share the excitement. But companionship without competency and capital can be risky business. While companionship is essential for friends, families, and marriages, if a business partnership is based only on companionship and does not have strong doses of capital and/or competency to support and sustain the relationship, it can be costly to both partners and the business.

Other considerations for building and maintaining a healthy partnership:

Shared Values
This is a tricky one. Often times the thrill of a new business will cause people to sell themselves on their values, and it may take time to determine the real deal. Values are not expressed by words but by actions. Observing a potential partner in situations other than your immediate business can give you some clues. How does your potential partner interact with others? Do they communicate openly and with respect? How do they handle crisis or conflict? Do they display integrity and honesty? Do they view the world realistically and manage their lives the same way?

Financial Transparency
Having facilitated and mediated business partnerships, it always strikes me how little business partners understand about each others’ personal financial conditions. Changing financial conditions can derail a good partnership, as one party finds themselves in an increasing need for more cash. If your partner or potential partner has difficulty managing their personal finances, it is highly unlikely he/she will have the capability to manage the changing financial condition of a business. It is important to have open dialogues with a partner regarding financial expectations of the business. How long can you maintain without taking home money? What backup plan do you and your partner have for personally getting through the lean times?

Exit Plans
Many entrepreneurial partners spend countless hours discussing how to build the business and expansion strategies. Far too little time is spent discussing how and when the owners would like to exit the business. The excitement and stress of day-to-day business keep entrepreneurs focused on the here and now. Consideration and time for dialogues and planning about the future for both partners and the business is crucial to a happy ending for all involved. How long do you and your partner intend to stay in this business? Is there a triggering point by age, lifestyle or financial gain at which one or the other of you will be ready to exit the business? Will you sell the business? If so, to whom?

Emergency Response Plans
In the adrenalin producing days of business, it is hard to imagine a crisis occurring, but responsible business owners have a clear emergency response plan. What happens in the case of fire or natural disaster? Do you carry business continuation insurance? What if one of you as owners has a health issue that would keep you from working? Buy and sell agreements between owners should clarify what triggers a sale to the other partners in the event of health issues or even death.

Management Contracts
Partners working in the business should have clearly defined roles and expectations, and it should be documented. Who gets to make what decisions, especially about money and people, is crucial between partners. Clear expectations for what a working partner is to deliver for the business, as well as actions that constitute dismissal or force a sale in a partnership are critical for helping keep a bad situation from getting worse. My own example of a partnership gone badly was remedied quickly because of such a document that had been signed by both of us and witnessed. Most business partners don’t want to discuss these situations with each other, but agreeing to what is expected from each other not only helps to mitigate the risk, but it also can build a foundation for greater trust.

Open Communication and Planning are Key
It is not my intention to discourage good business partnerships. However, understanding the risks and openly discussing how you will deal with such risks could increase the probability for a successful and profitable business partnership. Preparation and open dialogue on these topics can help increase the odds and the good fortune to be one out of the three business partnerships that works effectively.

About the Author

Bonnie Robertson has more than 18 years of experience in management and business consulting, during which she has worked with organizations of various sizes and industry focus to assist with management, leadership and organizational strategy and development, change management and integrations. Prior to founding The Robertson Company, she was the Director of Strategic Partner Relations for Microsoft Business Solutions. Prior to the acquisition of Great Plains Software Inc. by Microsoft, Bonnie served Great Plains as a strategic business consultant to channel partners as well as being a member of the management team in charge of organizational and leadership development. During her leadership as Vice President of Organizational and Leadership Development, Great Plains won multiple Best Practices Awards sponsored by Arthur Andersen including Exceeding Customer Expectations, Motivating and Retaining Employees and Strategic Leadership as well as being repeatedly named one of the best workplaces in the United States, appearing on FORTUNE magazine's list of the 100 Best Companies to Work for in America. In 2004, Bonnie founded the Robertson Company for the purpose of research and further development of entrepreneurs and their business success.